BlackBerry reportedly declined a number of takeover bids in recent months. Obviously, BlackBerry’s plans to revamp its business have caught the attention of several rival companies. The company also owns a large number of patents and has a legion of fans.
Last week there were several rumors about Samsung making a takeover offer to BlackBerry. Both Samsung and BlackBerry quickly denied those reports.
BlackBerry’s board of directors and its biggest investor Fairfax Financial Holdings are not exactly interested in selling at the moment. They want to support the turnaround plan launched by CEO John Chen. Company sources said that they have no intention to sell. Under the able leadership of John Chen BlackBerry has launched a multiyear project that includes the introduction of new handsets and services targeted at government and corporate customers. The sources also said that the prospective bids were below the potential value of BlackBerry.
Samsung could be one of the potential suitors. When Reuters published a story about Samsung making an offer to buy BlackBerry, BlackBerry stock soared 30% on Nasdaq. Share prices touched $12.60, the highest since June, 2013. BlackBerry dismissed the story. Samsung also said that the rumors were groundless.
Several other companies are also said to have approached the Canadian company. While BlackBerry has rejected all of these offers, many observers believe that the company will eventually be sold. BlackBerry popularized instant mobile messaging, smartphones and wireless emails in the 2000s. The company was eventually marginalized by the likes of Apple and Samsung. BlackBerry’s keyboard focused handsets could not compete against touchscreen devices launched by Apple and other companies.
While Samsung denied making a takeover offer, it is a potential buyer for various reasons. Samsung will certainly find value in the 44,000 patents held by BlackBerry. In addition, BlackBerry has been trying to supply its mobile software to the Korean company. Obviously, the two companies are getting closer.
China-based Lenovo made an attempt to buy BlackBerry in 2013. But the Canadian government opposed that move over fears of national security. Samsung is a South Korean company and is unlikely to encounter that kind of opposition.
John Chen took over as the CEO of BlackBerry in November, 2013. Immediately after his arrival, BlackBerry’s board of directors abandoned the decision to sell the company to Fairfax Financial Holdings. Instead, they opted for a refinancing deal led by Fairfax. With this refinancing, Fairfax now owns a 17% stake in BlackBerry.
Mr. Chen refocused the company’s efforts on launching keyboard focused handsets with excellent hardware and the latest BlackBerry 10 OS which is as good as iOS or Android. The latest offerings the Passport and the Classic are selling well.
Mr. Chen has stabilized the company’s bottom line and BlackBerry now has 3.1 billion dollars in investments and cash. While Mr. Chen’s goal is to sell 10 million handsets a year, BlackBerry has not been able to accomplish that. He expects new software revenues to materialize by summer. While it is true that Mr. Chen is facing an uphill task, it is still too early to write off BlackBerry.