A break-up of BlackBerry could now be the best option for the ailing smartphone maker as experts today raised doubts about whether a planned $4.7 billion (£2.93 billion) fire sale of the business will even happen.
Pierre Ferragu, senior analyst at Bernstein bank in London, said private-equity firm Fairfax’s offer to buy BlackBerry was only “a letter of intent agreement” and there were “material” risks it would fail.
The $9-a-share takeover approach “will turn into a definitive offer only after due diligence and once financing is secured”, said Ferragu. “Fairfax doesn’t seem to have entered any formal obligation to complete the deal.”
He urged clients to sell BlackBerry shares, which have dived from a 2008 peak of $149 as it has fallen far behind rivals such as Apple and Samsung.
Roberta Cozza, director at research firm Gartner, suggested BlackBerry’s patents, business services and its free BlackBerry Messenger (BBM) text-messaging platform would appeal to different buyers. “I think the value is in the different divisions than altogether,” said Cozza.
She warned BlackBerry’s phones have now fallen out of favour with consumers to such an extent it could be impossible to turn around.
Cozza said the delay before Fairfax makes a formal takeover bid means other buyers could emerge.
Ferragu said selling BBM could be an alternative to a full sale. He reckoned buyers are interested but it would bring in less than $2 billion.
TIMELINE
1985: Research In Motion founded in Waterloo, Canada
1997: RIM raises over $115m with a float on the Toronto Stock Exchange
1999: BlackBerry email service is launched
2002: Voice calls added to the BlackBerry
2007: RIM becomes Canada’s most valuable company in same year first Apple iPhone and Google’s Android platform are launched
2008: The keyboard-less BlackBerry Storm is released, but becomes a flop
2012: Thorstein Heins named as chief executive; bankers hired to help with strategic review
January 2013: RIM changes name of company to BlackBerry
August 2013: BlackBerry says it is looking at options that include a sale
September 20, 2013: Company admits it is heading towards second-quarter losses of over $950m and announces thousands of jobs to go
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