1. Shlooky's Avatar
    From the Globe and Mail...
    BlackBerry weighs real-estate sale - The Globe and Mail

    BlackBerry Ltd. is looking at options to quickly unlock value from its substantial real estate portfolio in its hometown of Waterloo, Ont., as the company works to finalize a $4.7-billion (U.S.) takeover plan.

    The smartphone maker owns more than 20 buildings in the Waterloo area, a collection built up during its rapid expansion over the past 10 years. With its business now in retreat, BlackBerry has begun to examine possible moves to its real estate portfolio.

    It embarked last week on a confidential process with real estate firms, asking them to outline ideas to generate the largest possible return in as little time as possible, according to sources. BlackBerry is willing to entertain a variety of options, including selling the portfolio and leasing back space, although it wants to retain a handful of key buildings, these sources said.

    Late last month, BlackBerry announced it will be cutting 4,500 jobs, more than 40 per cent of its work force, to slash costs as sales crumble amid intense industry competition. The cuts will leave it with more office space than it needs.

    The move also comes as BlackBerry is in the midst of a process to sell the entire firm outright and has received a preliminary offer from Fairfax Financial Holdings Ltd. for $9 (U.S.) per share.

    In an e-mailed statement, BlackBerry said that, like any major company, it evaluates its real estate on an ongoing basis. As we work to our target of reducing expenditures by approximately 50 per cent over the next three quarters, that includes optimizing our space, it said. Should space become unnecessary for BlackBerrys continued use, we will work with key partners in the community who may need some of our surplus space.

    The process is expected to determine how BlackBerry could leverage its real estate holdings to come up with more cash. That could make it more appealing to firms that are considering a takeover of the company. It is not clear from the companys moves, however, whether it is merely trying to obtain third-party opinions on the value of its real estate to provide to potential buyers, including Fairfax.

    Fairfax is in the midst of conducting due diligence on BlackBerry, and intends to produce a final offer to take over the company by Nov. 4. Fairfax has a number of potential backers for its consortium, each of which are weighing whether to join the deal and to what degree they want to participate. Meanwhile, BlackBerrys bankers are conducting a process to determine if there are other bidders for the firm.

    BlackBerry is a major real estate owner in the Waterloo region, dubbed Canadas Technology Triangle.

    Since its inception in 1984, the Waterloo-based firm has become the largest occupier of office space in the Waterloo Region, real estate firm Colliers stated in an item on its website that was posted after BlackBerry announced that it had signed the letter of intent to be sold to the Fairfax-led consortium. Currently holding a regional inventory of 1.6 million square feet of office space, BlackBerry comprises nearly 15 per cent of the total office market.

    The struggling technology company has sold some buildings in recent years to buyers such as Manulife Financial.

    BlackBerry notes in its annual report that its operations in Waterloo are housed primarily in two campus-style developments, which include 27 buildings, six of which it leases. The central Waterloo campus has engineering, manufacturing, and research and development operations. The northern campus, which has four newly constructed buildings, has corporate, administrative and finance operations. BlackBerry owns two buildings in nearby Cambridge, which house global logistics and repair services groups.

    According to the companys disclosure, the value of its land, based on cost, was $119-million as of June 1 and its related buildings, leasehold improvements and other real estate assets had a value of $1.28-billion, at cost (prior to any amortization). That includes real estate that it owns outside the Waterloo region.

    Neeraj Monga, an analyst with Veritas Investment Research, said it is very difficult to estimate the value of BlackBerrys real estate holdings in the area.

    They are the largest users of that real estate in and around Waterloo, he said. Somebody has to be able to fill all these buildings with new tenants. BlackBerrys dwindling employee base will change the dynamics of both the employment market and the real estate market in the region, he said.
    10-02-13 09:04 AM
  2. schmeat's Avatar
    Nokia 2.0!
    10-02-13 09:26 AM
  3. FSeverino's Avatar
    well... if they get rid of 40% of the staff, why do they need 100% of the offices?

    this is a given.
    10-02-13 10:28 AM
  4. birdman_38's Avatar
    That article along with this one BlackBerry breakup value pegged at about $5 billion, analysts say | Toronto Star brings to light an important point. Let's crunch the numbers:

    $1.4 billion real estate + $2.6 billion cash on hand + $1 billion in patents and other intellectual property + $1.2 billion for the network + $1.5 billion for software = $7.7 billion.

    Subtract $400 million in restructuring costs and $800 million to hypothetically close down hardware operations = $6.5 billion

    With their $4.7 billion offer involving no cash commitment, Fairfax is committing highway robbery
    10-02-13 10:36 AM
  5. JasW's Avatar
    That article along with this one BlackBerry breakup value pegged at about $5 billion, analysts say | Toronto Star brings to light an important point. Let's crunch the numbers:

    $1.4 billion real estate + $2.6 billion cash on hand + $1 billion in patents and other intellectual property + $1.2 billion for the network + $1.5 billion for software = $7.7 billion.

    Subtract $400 million in restructuring costs and $800 million to hypothetically close down hardware operations = $6.5 billion

    With their $4.7 billion offer involving no cash commitment, Fairfax is committing highway robbery
    Which is why there are other buyers beating down the door with better offers.
    10-02-13 10:55 AM
  6. Rooster99's Avatar
    That article along with this one BlackBerry breakup value pegged at about $5 billion, analysts say | Toronto Star brings to light an important point. Let's crunch the numbers:

    $1.4 billion real estate + $2.6 billion cash on hand + $1 billion in patents and other intellectual property + $1.2 billion for the network + $1.5 billion for software = $7.7 billion.

    Subtract $400 million in restructuring costs and $800 million to hypothetically close down hardware operations = $6.5 billion

    With their $4.7 billion offer involving no cash commitment, Fairfax is committing highway robbery
    As a long shareholder, I hear you. I don't get why there aren't any other offers. Other than prhaps the $150M RIM agreed to pay Fairfax if they don't take his offer. This really, really sucks. I'm in at $10.15/share and was willing to live with no gain if things didn't work out, figuring I was at least in breakup value range. And I still think I am, but for some reason Fairfax is able to buy RIM at 50-60% of breakup value. I know something is worth whatever others will pay for it, but 50-60% makes no sense.

    - R.
    10-02-13 11:16 AM
  7. sentimentGX4's Avatar
    Nokia 2.0!
    Blackberry and BBRY shareholders really, really wish...

    And I still think I am, but for some reason Fairfax is able to buy RIM at 50-60% of breakup value. I know something is worth whatever others will pay for it, but 50-60% makes no sense.
    How do you know how much people will pay for the components? Shouldn't you apply the same logic to that?

    There's no means you can pin that Fairfax is paying 50 to 60% of BBRY's value.
    10-02-13 11:17 AM
  8. schmeat's Avatar
    Blackberry and BBRY shareholders really, really wish...
    I meant the desperation of selling buildings. Not the buy out. I wish that too.
    10-02-13 12:43 PM
  9. rim_investor's Avatar
    As a long shareholder, I hear you. I don't get why there aren't any other offers. Other than prhaps the $150M RIM agreed to pay Fairfax if they don't take his offer. This really, really sucks. I'm in at $10.15/share and was willing to live with no gain if things didn't work out, figuring I was at least in breakup value range. And I still think I am, but for some reason Fairfax is able to buy RIM at 50-60% of breakup value. I know something is worth whatever others will pay for it, but 50-60% makes no sense.

    - R.
    I would be happy to be in at $10.15...$27 for me on 1700 shares.

    Posted via my AWESOME Z10 on CB10
    10-02-13 03:27 PM
  10. birdman_38's Avatar
    I would be happy to be in at $10.15...$27 for me on 1700 shares
    Wow
    10-02-13 03:32 PM
  11. Bold_until_Hybrid_Comes's Avatar
    I would be happy to be in at $10.15...$27 for me on 1700 shares.

    Posted via my AWESOME Z10 on CB10
    May God have mercy
    10-02-13 03:53 PM

Similar Threads

  1. Replies: 9
    Last Post: 10-04-13, 06:01 AM
  2. Replies: 31
    Last Post: 10-02-13, 07:56 PM
  3. What's a Blackberry?
    By ChrFerreira in forum General BlackBerry Discussion
    Replies: 8
    Last Post: 10-02-13, 10:09 AM
  4. Is alicia keys planning buy blackberry?? [Humor]
    By fairycake in forum News & Rumors
    Replies: 3
    Last Post: 10-02-13, 05:51 AM
  5. BlackBerry 10 certified NATO security! Yeehaaaa!
    By toc610 in forum News & Rumors
    Replies: 2
    Last Post: 10-02-13, 03:37 AM
LINK TO POST COPIED TO CLIPBOARD