Ailing BlackBerry agrees to $4.7 billion buyout

[p(-)0ENiX]

A man is silhouetted against a video screen with the Blackberry logo as he poses with a Blackberry Q10 in the central Bosnian town of Zenica in this September 21, 2013 file photo illustration. -Reuters Photo

Ailing BlackBerry agrees to $4.7 billion buyout
AFP - 2013-09-24 01:18:58​

OTTAWA: BlackBerry announced on Monday it has agreed to a $4.7 billion buyout by a consortium of investors who plan to take the struggling Canadian smartphone maker private.

The company said in a statement that it has “signed a letter of intent agreement under which a consortium to be led by Fairfax Financial Holdings Limited has offered to acquire the company subject to due diligence.”

Fairfax, a Canadian firm headed by billionaire Prem Watsa, is already BlackBerry's largest shareholder with approximately 10 per cent of its shares.

Watsa resigned from BlackBerry's board when it announced in August its intentions to search for a suitor.

Under the proposed deal the consortium would offer $9 for each outstanding share, and Fairfax would contribute its own shares in the transaction.

BlackBerry said its board of directors support the plan.

A firm deal, once due diligence is completed, is expected to be announced by November 4. It hinges also on the consortium obtaining financing.

BlackBerry said it would continue a search for a possibly better suitor in the interim.

BlackBerry stock was down six percent to $8.23 before trading was halted just prior to its announcement. Its shares climbed back up to $9.07 in afternoon trading.

Analysts meanwhile reacted with measured optimism.

“This is probably the best possible outcome of several unattractive options for BlackBerry,” said analyst Jack Gold of J. Gold Associates.

While BlackBerry helped create a culture of mobile users who were glued to the company's smartphones, many of those customers have since moved to Apple iPhones or other device makers such as Samsung, mainly using Android.

According to International Data Corporation (IDC), BlackBerry's global market share had slipped to 3.7 per cent in the second quarter, the lowest since tracking began, while Android accounted for nearly 80 per cent.

The company formerly known as Research In Motion unveiled a new corporate name and a new platform in January as it sought to regain momentum, but its most recent numbers suggest this has been a spectacular failure.

On Friday, the company announced it was laying off 4,500 staff or one-third of its global workforce after a dismal launch of new smartphones earlier this year that were meant to revive BlackBerry.

It also said it expected to post a nearly $1 billion loss in the second quarter due to writedowns linked to poor sales of its new Z10 touchscreen smartphone, a device aimed specifically at competing against Apple and Android devices.

Gold and other analysts said going private, and possibly returning company founder Mike Lazaridis at the helm, as has been rumored, would give the company breathing room to “put the house in order.”

Going forward, BlackBerry would be a much smaller player in handheld devices, but “being private would mean that Wall Street is not continuously breathing down their neck,” said Gold.

Furthermore, its key enterprise customers may not feel as compelled to replace their BlackBerry smartphones and servers for fear that the company is going out of business.

“It could provide them with cover to re-architect the company even more than they are now,” said Gold.

The company's sustainability, however, still remains in doubt for most.

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[T90TankGuy]

The guy who is buying it out and is heading the consortium is an Indian from HYD.
Meet Hyderabad-born Prem Watsa, the man who is buying BlackBerry - Rediff.com Business

 

[livingdead]

its unlikely to be turned around...

 

[xyxmt]

The guy who is buying it out and is heading the consortium is an Indian from HYD.
Meet Hyderabad-born Prem Watsa, the man who is buying BlackBerry - Rediff.com Business

a Canadian!

 

[T90TankGuy]

a Canadian!

we still claim him as our own

 

[JanjaWeed]

Blackberry never managed to recover from that global service outage back in 2011. It was downhill from then on. A real disappointment for it's loyal client base!!

 

[p(-)0ENiX]

Nokia's mobile division has just been bought off by Microsoft, & now another Smartphone manufacturer is struggling. It's sad to see Blackberry in such a condition. There was a point in time that they were extremely popular in the enterprise market at least. Both Blackberry & Nokia made a similar mistake, ignoring the iOS & eventual Android attack. Blackberry had potential, BlackBerry OS 10 displays some of that potential, but unfortunately, it was too little too late. BlackBerry's key failures that contributed to the continuing loss of customers were not just the constant delay in the current generation operating system, but also their inability to cultivate the App World & build upon their services. Let's not forget their continuing focus on the enterprise market while displaying a neglect of the consumer market, & the latter happens to be the most important of them all. If a business succeeds in raising popularity among the average consumers, the enterprises will naturally follow suit. Hopefully, they will avoid repeating the same mistakes in the future.

 

[AZADPAKISTAN2009]

They lost alot of high end customers after they allowed their encrypted emails to be decrypted by governments

 

[Thorough Pro]

misreporting at its best......that is indian misreporting.

The indian guy is heading the US firm which is offering to buy through a consortium..........not that the indian guy is buying

The guy who is buying it out and is heading the consortium is an Indian from HYD.
Meet Hyderabad-born Prem Watsa, the man who is buying BlackBerry - Rediff.com Business

That was not the reason, it was already in hot waters......primarily because of delays in launcing new handsets and more importantly new platform, BB10.

Blackberry never managed to recover from that global service outage back in 2011. It was downhill from then on. A real disappointment for it's loyal client base!!

 

[p(-)0ENiX]

BlackBerry reportedly in talks with Google, Samsung, and others about potential sale
By Bryan Bishop on October 4, 2013 08:53 pm​

In September BlackBerry received a $4.7 billion buyout offer from Canadian holding company Fairfax Financial, but it's still pursuing possible deals with other companies — and Google may be among them. Reuters reports that BlackBerry has asked for "preliminary expressions of interest" from a number of tech companies, including the search giant, Intel, LG, Samsung, and Cisco. It's asking to hear from the companies by next week, though it's not clear which of the them, if any, will actually bid on BlackBerry, and if the bids will be for the company as a whole or for a particular portion of its business.

Despite its failure in the commercial smartphone space — last month BlackBerry announced it was retreating from the market entirely — BlackBerry's patents and network products have been highlighted as areas of interest for potential buyers. The move to sell isn't a surprise either. It was reported last month that BlackBerry's board was hoping to sell the company as soon as November, and with the troubled firm recently announcing 4,500 layoffs the urgency to find a buyer is likely only increasing.

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So are any of these companies likely to purchase Blackberry? The patents here probably refer to BlackBerry's encryption technology, the design & features of BlackBerry OS 10, etc.

 

[[Bregs]]

Nokia and blackberry both have surprisingly failed miserably in smart phone arena

 

[p(-)0ENiX]

How would you like to try a GoogleBerry on for size?
Anna Scantlin (Contributing Editor) - Published: Yesterday at 11:50 PM​

The mobile giant known as BlackBerry has had an interesting year to say the least - and by interesting, I mean somewhat depressing. I've expressed in past articles that it is bittersweet knowing that a company that was so popular not all that long ago, and a company that had such high hopes at the beginning of the year of renewing the love in their platform, is actively seeking to sell their company by next month. Although BlackBerry already agreed to be acquired by Fairfax, according to our news hound Alex it seems that BlackBerry isn't done shopping for a new owner yet. While both parties are waiting for the due diligence period to end and making sure they really want to go through with this sale and purchase, BlackBerry is making sure that this is the absolute best deal they're going to get.

The sale of BlackBerry could mean many things. Depending on the terms and agreements, a new company could inherit all of what BlackBerry has to offer, or possibly only some. While it seems that Fairfax has stated that they have big plans in store for BlackBerry and its customers, it's not surprising to learn that BlackBerry is considering selling itself to a company that assisted in its downfall. Rumors suggest that BlackBerry may be in talks with Google regarding the sale of the company, which got me to thinking about what life would be like in a world with a company like "GoogleBerry".

The first thing that came to mind for me, just to put a picture in my head, was an Android device on BlackBerry hardware. Now, I'll admit, I'm not sure how well a device like the Q10 running on Android would sell these days. Android has tinkered with BlackBerry-like designs on their phones before, and none of them have ever gotten to be very popular. The design works well with BlackBerry, but with Android it seems like bigger virtual screens are going to be more popular than smaller screens with a physical keyboard. As for the Z10 and A10 models, to be quite honest, there wasn't anything super special about the builds that would make me think it would do any better over other brands of hardware already out on the market. Android is a very saturated platform with plenty of hardware to choose from as it is - and other than the signature look with a physical QWERTY keyboard, BlackBerry phones don't have a whole lot to offer. But I do imagine there are lot of design features that BlackBerry has patents on that would have Google thinking about the purchase.

Patents. And that's when I realized the real reason behind such a sale would be a good buy for Google. BlackBerry has so many useful patents that Google could use against the competition. BlackBerry is still very well-known for how secure their servers are, and I have a feeling that if anybody could benefit from such notorious security features that it would be Android. Even though, as it turns out, Android isn't really that bad security-wise, it could still use the marketing boost to help its argument.

There's also the possibility that Android could take parts from BlackBerry OS/BlackBerry 10 and implement them in with Android, and kind of combine the two somewhere down the line. I imagine this would mean taking all that makes BlackBerry Messenger and making it Google's own brand. With both Google services and BBM already being on iOS, it seems like it wouldn't be that hard to combine the two to make one super messaging service for both platforms already involved.

Although I'm a little upset to see BlackBerry unable to carry on in its current state, I can't say that the idea of BlackBerry and Google combining would make me very upset. I like BlackBerry, and I like Android. I think that both would be able to complement each other nicely; after all, Android has one of the major missing components that I think BlackBerry needed in order to succeed, and that's having most mainstream applications readily available. Sure, you can sideload some Android applications onto BlackBerry 10, but a lot of people don't know and don't care to deal with that in order to get it. BlackBerry's security could help people who are unsure about the security of Android feel more comfortable with the platform. I think it could work out well, if it ever happened to come to fruition.

Readers, what are your thoughts on a possible Google/BlackBerry merger? What features or combinations of the two would make you consider purchasing a GoogleBerry device?

Images via Phandroid, Business Insider

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[Black Eagle 90]

Really we would love to see that PEL or Dawlance will going to produce our own Pakistani Cell Phones, Tablets, Laptops and Desktop P.Cs for local market with PAC....

 

[p(-)0ENiX]

Really we would love to see that PEL or Dawlance will going to produce our own Pakistani Cell Phones, Tablets, Laptops and Desktop P.Cs for local market with PAC....

PAC? Pakistan Aeronautical Complex?

QMobile is popular in Pakistan, but I am not a 100% sure about it being local. It may be a subsidiary of a Chinese firm or something else.

It's all about diversifying the business, both PEL & Dawlance could expand in to this market but they are sure to face many difficulties. Unlike other consumer electronic markets, the technology segment is extremely competitive, & requires a great deal of R&D, innovation, marketing, et cetera to succeed in.

If there is one thing I have noticed in the Middle Eastern market, it's that branded desktop computers aren't very popular. A majority of people tend to prefer having a custom built tower with obviously branded peripherals. I guess that allows for greater flexibility on specifications & price. Laptops & other mobile computing devices is where OEMs are likely to benefit the most.

 

[p(-)0ENiX]

BlackBerry abandons sale process, CEO out
AP - 2013-11-05​

TORONTO: BlackBerry abandoned its sale process on Monday, and announced it will replace its chief executive.

Fairfax Financial, BlackBerry's largest shareholder with a 10 per cent stake, said it won't buy the struggling smartphone company and take it private but said that Fairfax and other investors will inject $1 billion as part of a revised investment proposal.

BlackBerry said CEO Thorsten Heins is stepping down. Heins took over in early 2012 after the company lost billions in market value, but he failed to turn the company around with BlackBerry's new devices this year.

Former Sybase chief executive John Chen has been appointed chair of BlackBerry's board of directors and will serve as interim CEO.

Chen's emphasis on software in an interview with The Associated Press could mean the company might ultimately get out of selling smartphones.

Chen said he'll be looking for a CEO with a strong software and services background. He noted that BlackBerry Messenger, the popular messaging application, has been downloaded by over 20 million users since it became available on Google's Android and Apple's IOS platforms.

''I'd like to find somebody to help me monetize that,'' Chen told the AP.

Chen said a solid team is in place, but they need to focus. ''Maybe I can help that. More of a transitional thinking of we're really not in phones but we're in phones for software, for services,'' Chen said.

Chen also said he wants to focus on business users.

Fairfax head Prem Watsa will be appointed to the board. Watsa said Chen did a terrific job of turning around Sybase, an enterprise software data management company. Chen was chairman and CEO from 1998 until the company was acquired in 2010 by SAP AG.

''He joined in 1998 and the company was going through similar problems, the stock price was down 90 percent, four years of losses, John joined them and had one of the best track records that I have seen,'' Watsa said. Watsa said he remains a fan of Heins.

''I think Thorsten did a terrific job given the hand he had been dealt. BlackBerry announced in September that Fairfax Financial Holdings Ltd. signed a letter of intent that contemplated buying BlackBerry for $9 a share, or $4.7 billion, and taking it private. Fairfax said then it wouldn't increase its 10 per cent stake and the company went about trying to attract other investors.

Watsa said they did due diligence and worked with a consulting company that recommended that taking it private with borrowed money was not the way to go. ''To load this company with too much debt was not appropriate,'' Watsa told the AP.

''We didn't want it leveraged. We didn't even bother to go there. Once we decided that a leveraged buy-out with high debt was not appropriate we didn't push it any further. We backed off completely.''

Watsa said BlackBerry needs financial flexibility. ''We probably could do it, but we decided not to add high yield debt to the company's capital structure,'' he said. He said five or six investors had been interested in a buyout.

BGC analyst Colin Gillis said the failure to complete a successful sale was not an unexpected outcome for the market because the stock was trading well below the possible $9 bid price.

''They never had any money beyond the Fairfax money,'' Gillis said. ''It's an under $5 billion market cap company with $2 billion in cash, you put up $1 billion and you couldn't get the rest?''

The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before Apple introduced the iPhone in 2007 and showed that phones can handle much more than email and phone calls.

In the years since, BlackBerry Ltd. been hammered by competition from the iPhone as well as Android-based rivals.

This year's much-delayed launch of the BlackBerry 10 system and the fancier devices that use it was supposed to rejuvenate the brand and lure customers.

It did not work. Waterloo, Ontario-based BlackBerry recently announced 4,500 layoffs, or 40 per cent of its global workforce, and reported a quarterly loss of nearly $1 billion.

Although BlackBerry was once Canada's most valuable company with a market value of $83 billion in June 2008, the stock has plummeted to less than $8 from over $140 a share. That gives it a market value of about $3.5 billion.

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