BlackBerry Will Sell Itself For $4.7 Billion 149
Nerval's Lobster writes "A consortium led by financial-holding company Fairfax Financial has agreed to acquire BlackBerry for $4.7 billion. Under the terms of the agreement, Fairfax Financial will acquire every BlackBerry stock-share it doesn't already own. Further details are pending, including future management structure and whether BlackBerry will continue with its stated intent to lay off thousands of employees over the next few months. 'The Special Committee is seeking the best available outcome for the Company's constituents, including for shareholders,' Barbara Stymiest, chair of BlackBerry's Board of Directors, wrote in a statement. 'Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.' A special committee formed by BlackBerry's Board of Directors had spent the past few weeks looking for a potential acquirer. BlackBerry has seen its market-share crumble as businesses and consumers embrace rivals such as Apple's iPhone and Google Android devices."
Consortium (Score:5, Interesting)
What I am most curious about is who is part of that consortium. That will be the most telling about the future of BlackBerry.
My guess is a collection of tech companies that want to keep BlackBerry's patents out of the hands of a patent troll and thus the company will be closed down, sold off in parts, and otherwise officially killed and the patents will be shared among the consortium companies and kept safe. Because, let's be honest - BlackBerry is dead - there is nothing else of significant value remaining in the company.
RIM (and Nokia) made the biggest mistake possible by ignoring the iPhone and what it represented to the entire mobile industry. Their complacency killed the company. They changed far too little, faaaaaar too late.
(Ironically, my captcha was "overtake"...)
Prediction: (Score:4, Interesting)
In 2 years time, watch for this news headline:
"Fairfax Financial announces a $4.6 billion writedown on the value of their BlackBerry acquisition. Layoffs are proceeding. Fairfax Financial has announced plans to sell off all corporate assets including BlackBerry's patent portfolio. A buyer has not been identified at this time."
Re:I would sell myself for $4.7 billion. (Score:4, Interesting)
Checking last years balance sheet 4.7 billion is about how much RIM has in owned property.
Does that $4.7 billion balance sheet include the $1 billion worth of unsold phones that Blackberry is stuck with?
(As reported in the Wall Street Journal: http://online.wsj.com/article/SB10001424127887323308504579087471781835480.html [wsj.com])
Good move to get out of the stock market (Score:4, Interesting)
In all reality, this private equity firm is probably going to strip all the remaining assets from BlackBerry and kill the company, but being out of the limelight is the best thing for a company in this situation to do.
When a company is publicly traded, you can _maybe_ get it to agree to changes that pay off in 1 or 2 quarters. The stock analysts and CNBC idiots make it so that every time the CEO goes to the bathroom is scrutinized for any shred of news. Anything beyond that 2-quarter limit just can't be done. Anything that involves tough decisions that affect share price can't be done either. BlackBerry needs that kind of time out of the public eye to fix the problems they have. It's too bad also -- because we're stuck in the position of having our retirements dependent on the fickle stock market (those of us without pensions, that is.) I think that if the stock market went back to being a rich man's club, and we didn't have entire news organizations waiting to pounce on every utterance that company executives make, the funding picture for companies would be much better. Look at how much negative press BlackBerry has endured -- no matter what they do, every news outlet says "they suck." Gee, why can't we keep the share price up? Why isn't anyone ignoring the advice and investing?
I echo the sentiments of others in this thread though -- Microsoft would be stupid to not buy the patents they have, and they could even fold the secure messaging stuff into Exchange.
Re:Prediction: (Score:4, Interesting)
In 2 years time, watch for this news headline:
"Fairfax Financial announces a $4.6 billion writedown on the value of their BlackBerry acquisition. Layoffs are proceeding. Fairfax Financial has announced plans to sell off all corporate assets including BlackBerry's patent portfolio. A buyer has not been identified at this time."
The problem with this scenario is that Fairfax's Chairman and CEO Prem Watsa, who controls half of its stock. Watsa is a self-made man; he graduated from the Indian Institute of Technology Madras in 1972, then migrated to Canada.
People who know a lot more about investing than I do refer to Mr. Watsa as the Canadian Warren Buffet.