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  • BlackBerry Buyout Fails, Thorsten Heins Ousted

    Today BlackBerry announced that the proposed $4.7 billion buyout for the company has fallen through. Today was the final day that a consortium of interested buyers led by Fairfax Financial Holdings Limited had for due dilligence. The consortium has been unable to raise the cash for the proposed sale, and instead will be investing $1 billion in BlackBerry through a debenture. This new funding is expected to come through within the next two weeks.

    “The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders,” said Barbara Stymiest, current chair of BlackBerry’s board of directors. “This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.”

    When the funding deal concludes, current BlackBerry CEO Thorsten Heins will be out as CEO. Heins and fellow BlackBerry board member David Kerr are also expected to resign from the board at that time.

    John Chen, former CEO of Sybase, will be appointed to the role of interim CEO after the funding concludes. Chen will also join the BlackBerry board as its Executive Chair and will, according to BlackBerry, be responsible for the “strategic direction, strategic relationships and organizational goals of BlackBerry.” Prem Watsa, Chairman and CEO of Fairfax Financial, will also be appointed as the chair of the board’s Compensation, Nomination, and Governance committee.

    “I am pleased to join a company with as much potential as BlackBerry,” said Chen. “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline, and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”

    The news of the buyout failure comes as a huge blow to BlackBerry. Though the company’s BlackBerry Messenger has recently become popular on iOS and Android platforms, the software’s release could be too late to save the company.

    BlackBerry last month revealed a nearly $1 billion quarterly loss on revenues that were dismally low. The company has been struggling to sell its new BlackBerry 10 smartphones since their release early this year, and the company’s market share has continued to drop. The news also comes just as BlackBerry is in the middle of another round of layoffs, with at least 4,500 more employees expected to leave the company by the end of this year.

  • BlackBerry Patent Portfolio Could Draw Interest

    Back in August, following another dismal quarterly report, BlackBerry announced that it was exploring “strategic alternatives” – including the possible sale of the company. Earlier this week that possibility became a reality, with a consortium led by FairFax Financial offering $4.7 billion for the Canadian company.

    The buyout seemed to have been announced early, with FairFax still having six weeks for due diligence. During that time, BlackBerry has the option of courting other offers. Though another wholesale offer for BlackBerry is unlikely to appear, CNN this week reported that offers for the company’s patent portfolio are a very real possibility.

    The report states that BlackBerry’s patent portfolio could be worth $2 billion to $3 billion, making up possibly more than half of the FairFax offer. As was speculated shortly after BlackBerry announced its “strategic alternative” search, the company could find a better offer by selling off its more important pieces. BlackBerry’s stockpile of mobile enterprise patents could prove particularly valuable in such an endeavor.

    The CNN report goes on to quote Chris Marlett, CEO of MDB Capital Group as saying BlackBerry’s patents could give a “massive advantage” to any company engaged in the widespread practice of tech patent lawsuits. Marlett was also quoted as saying the patents make up such a large portion of BlackBerry’s value “because their business is falling apart.”

    (via BGR)

  • BlackBerry Buyout Announced For $4.7 Billion

    Last month, following yet another disappointing quarterly report, BlackBerry announced that it had formed a committee to consider “strategic alternatives.” Among these alternatives was the option of selling the entire company. BlackBerry today announced that this possibility has become a reality.

    BlackBerry today announced that it has been bought for $4.7 billion by an investment consortium. The consortium is led by FairFax Financial Holdings, which already owns 10% of BlackBerry shares. The consortium is seeking financing for the transaction from Bank of America Merrill Lynch and BMO Capital Markets.

    BlackBerry shareholders would receive $9 cash for every share they hold under the agreement, and BlackBerry stock has shot up on the news. The deal would take BlackBerry private, which could allow the company to focus on a long-term turnaround strategy surrounding the company’s enterprise solutions offerings. It’s a plan that largely mirrors the one set out by Michael Dell, who recently purchased Dell and has promised a long-term turnaround for the newly private company focusing on enterprise solutions and services.

    The transaction will be completed after FairFax and the other members of the consortium perform due diligence during a six-week period expected to end on November 4. During that time, BlackBerry may also continue shopping itself for better offers.

    “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” said Prem Watsa, chairman and CEO of FairFax. “We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”

  • BlackBerry Could Be Sold Off in Pieces

    BlackBerry Could Be Sold Off in Pieces

    Earlier this week, BlackBerry announced that the company was exploring “strategic alternatives.” Though the company stated it will be exploring possible joint ventures or strategic partnerships, it also expressed a willingness to take offers for the business itself. The announcement confirmed what analysts and industry watchers had known for some time – that BlackBerry’s decision to double-down on high-end BlackBerry 10 smartphones in an effort to compete with Apple and Samsung was a poor one.

    While speculation runs rampant about who might possibly want to buy BlackBerry, another possibility has presented itself. DigiTimes today is reporting that BlackBerry could end up being sold piecemeal. According to the reports unnamed “sources at Taiwan handset makers,” that possibility is actually higher than the company being sold as a whole.

    Acquiring BlackBerry might be a losing proposition for any entity that might buy it. The BlackBerry 10 platform has proved to be a failure, and the company’s subscriber numbers are falling rapidly. Keeping the BlackBerry handset business alive would cost billions.

    In contrast, BlackBerry undoubtedly has a stockpile of high-value patents, particularly when it comes to mobile enterprise. DigiTimes mentions Samsung and Amazon as possible buyers for BlackBerry patents, though Apple, Google, and Microsoft could also find value in them. In addition to its patents, BlackBerry’s enterprise services division, along with BlackBerry Messenger, could prove valuable to companies serving the business sector. IBM and Cisco were mentioned in the report as parties that might be interested in such services.

    (via DigiTimes)

  • BlackBerry Explores “Strategic Alternatives,” Including Company Sale

    2013 was supposed to be a big comeback year for BlackBerry. The company released its new BlackBerry 10 smartphones in January – its big push to stay relevant in the high-end smartphone market. Despite a name change and rebranding effort, those devices have not sold well enough to turn the company around. BlackBerry financial results this year have been dismal, with falling subscriber numbers highlighting what industry watchers have known for over a year.

    BlackBerry today announced that its board of directors has formed a special committee to consider “strategic alternatives.” The options to be explored include joint ventures or strategic partnerships to better promote BlackBerry 10, as well as the option of selling the company.

    The committee will be chaired by BlackBerry board member Timothy Dattels and includes BlackBerry Chairperson Barbara Stymiest and BlackBerry CEO Thorsten Heins. BlackBerry board member Prem Watsa has resigned his position on the board, citing his role as chairman and CEO of Fairfax Financial as a possible conflict of interest.

    “We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition,” said Heins. “As the special committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network.”