BlackBerry Talking to Google, LC, Intel, Others About Bids

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Barry Levine avatar

BlackBerry Talking to Google, LC, Intel, Others About Bids
BlackBerry may be slipping in market share and stock price, but it could also become a hotly-bidded property. In addition to an offer on the table from a Canadian investment firm, the Waterloo, Ontario-based company is also talking to, or looking to talk to, Cisco, Google, Intel, LC, Samsung and SAP, among possible others.

The talks were reported Friday by Reuters, which cited “several sources close to the matter.” A preliminary offer for $4.7 billion to take the company private was made late last month by Fairfax Financial Holdings, which is also BlackBerry’s largest shareholder. Although Fairfax issued a letter of intent and declared a price, BlackBerry has until November 4 to complete a due diligence period, during which time Fairfax will analyze the handset maker’s financials and BlackBerry can, if it wants, accept another offer.

BlackBerry is Looking

The discussions or invitations to discuss with Google et al, then, is part of BlackBerry’s due diligence. If BlackBerry does accept an offer other than Fairfax’s, however, it will have to pay a fine of about US$ 150 million to Fairfax, so that amount is undoubtedly being added to any price being sought from non-Fairfax suitors.

The interest in BlackBerry by big tech players like Google appears to be focused on its global server network, its patent portfolio and its mobile device management software, rather than its handsets. On the other hand, an offer to take the company private, such as Fairfax’s, is more likely designed to keep the company’s product lines, although Fairfax has indicated it would focus more on the business market.

Learning Opportunities

The tech companies being mentioned as interested in all or part of BlackBerry have declined or are not available to comment, but, given the relatively low share price of $9/share offered by Fairfax, it would be surprising if BlackBerry was not actively engaged in talks with other possible suitors. In addition to Fairfax, other private equity firms have reportedly shown an interest in BlackBerry, including Cerberus Capital Management, and BlackBerry co-founder Mike Lazaridis is rumored to be considering a bid.

New Mobile Management

Google, which now owns Motorola’s mobile division, could boost its position and that of its open source Android operating system with BlackBerry’s market share, although the Canadian company's patent portfolio and global server network might be of more value. Intel is firing on all cylinders to get a bigger foothold in the mobile market, and BlackBerry could provide a leg up. LC or Samsung might similarly want to grab BlackBerry’s market share, while Cisco could be more interested in its server network and its mobile device management software.

Meanwhile, BlackBerry previewed on Monday a new, multi-platform, cloud-based enterprise mobility solution that could boost its current profile in this space. The new service provides management for mobile devices, applications, security and user self-service, for BlackBerry, iOS and Android smartphones. It’s not yet clear if the service, currently in beta testing, will replace the company’s current mobile device management solution, Enterprise Service 10, or complement it. In any case, BlackBerry’s expanding device/app management solution adds another possible value to any suitor’s bid.