The Globe And Mail is reporting that BlackBerry might have found someone to save them. Fairfax Financial Holdings Ltd. has put together a group to put in a $4.7 billion bid for the struggling smartphone maker which would result in them going private:
BlackBerry is giving the group six weeks to conduct due diligence, with a final agreement expected by Nov. 4. BlackBerry is able to look for alternative offers in the meantime, but the Fairfax group has a right to match them. Fairfax’s equity partners want to remain anonymous until the due diligence is completed.
“BlackBerry has fallen on hard times recently, but we have every confidence it will be successful again,” Fairfax CEO Prem Watsa said in an interview.
IF this deal can be completed, it would give a much needed lifeline to BlackBerry. Being private would remove the pressure of answering to shareholders and making business plans one quarter at a time. That would give it the space it needs to try and execute a comeback.
Perhaps things are finally looking positive for BlackBerry?
UPDATE: Jan Dawson, chief telecoms analyst at Ovum gave me the following comments:
“Taking BlackBerry private doesn’t solve the fundamental problems at the company. First, the company’s device sales are cratering, and its announcement last week that it no longer intends to pursue the consumer market is essentially the death knell for this business. BlackBerry’s supply chain relies on scale for profitability, and it will never again be able to achieve the scale necessary to make money on devices. It’s likely that BlackBerry will be out of the device business entirely by the middle of next year. The next challenge is that BlackBerry’s other businesses are all to a greater or lesser extent dependent on its devices business. BlackBerry Messenger’s installed base is entirely on BlackBerry devices, and its launch on iOS and Android was aborted over the weekend. It’s mobile device management business is entirely based on its ability to manage BlackBerry devices, and its cross-platform management is much less well established than those of major competitors like MobileIron and Airwatch. If you strip out BlackBerry’s use of its QNX operating system for BlackBerry devices, you’re left with a business that’s worth less than $100 million. About the only part of BlackBerry that looks to be worth a significant amount at this point is its patent portfolio, and that certainly wouldn’t justify the purchase price on its own.
“Normally, companies are taken private in order to give a long-term strategy time to payoff without the hassles of short-term investor scrutiny. But BlackBerry’s key problem for the last couple of years has been the lack of such a long-term strategy. It simply hasn’t articulated a way to rebuild its business as its device sales drop precipitously. Unless Fairfax plans to radically change or accelerate BlackBerry’s strategy, it’s unlikely to be able to turn the company around. And that means we’re likely seeing the beginning of the end for one of the most iconic brands in mobile technology.”
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This entry was posted on September 23, 2013 at 1:46 pm and is filed under Commentary with tags BlackBerry. You can follow any responses to this entry through the RSS 2.0 feed.
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Breaking: BlackBerry May Have A Buyer [UPDATED]
The Globe And Mail is reporting that BlackBerry might have found someone to save them. Fairfax Financial Holdings Ltd. has put together a group to put in a $4.7 billion bid for the struggling smartphone maker which would result in them going private:
BlackBerry is giving the group six weeks to conduct due diligence, with a final agreement expected by Nov. 4. BlackBerry is able to look for alternative offers in the meantime, but the Fairfax group has a right to match them. Fairfax’s equity partners want to remain anonymous until the due diligence is completed.
“BlackBerry has fallen on hard times recently, but we have every confidence it will be successful again,” Fairfax CEO Prem Watsa said in an interview.
IF this deal can be completed, it would give a much needed lifeline to BlackBerry. Being private would remove the pressure of answering to shareholders and making business plans one quarter at a time. That would give it the space it needs to try and execute a comeback.
Perhaps things are finally looking positive for BlackBerry?
UPDATE: Jan Dawson, chief telecoms analyst at Ovum gave me the following comments:
“Taking BlackBerry private doesn’t solve the fundamental problems at the company. First, the company’s device sales are cratering, and its announcement last week that it no longer intends to pursue the consumer market is essentially the death knell for this business. BlackBerry’s supply chain relies on scale for profitability, and it will never again be able to achieve the scale necessary to make money on devices. It’s likely that BlackBerry will be out of the device business entirely by the middle of next year. The next challenge is that BlackBerry’s other businesses are all to a greater or lesser extent dependent on its devices business. BlackBerry Messenger’s installed base is entirely on BlackBerry devices, and its launch on iOS and Android was aborted over the weekend. It’s mobile device management business is entirely based on its ability to manage BlackBerry devices, and its cross-platform management is much less well established than those of major competitors like MobileIron and Airwatch. If you strip out BlackBerry’s use of its QNX operating system for BlackBerry devices, you’re left with a business that’s worth less than $100 million. About the only part of BlackBerry that looks to be worth a significant amount at this point is its patent portfolio, and that certainly wouldn’t justify the purchase price on its own.
“Normally, companies are taken private in order to give a long-term strategy time to payoff without the hassles of short-term investor scrutiny. But BlackBerry’s key problem for the last couple of years has been the lack of such a long-term strategy. It simply hasn’t articulated a way to rebuild its business as its device sales drop precipitously. Unless Fairfax plans to radically change or accelerate BlackBerry’s strategy, it’s unlikely to be able to turn the company around. And that means we’re likely seeing the beginning of the end for one of the most iconic brands in mobile technology.”
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This entry was posted on September 23, 2013 at 1:46 pm and is filed under Commentary with tags BlackBerry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.