BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is in discussion with Google, Cisco and SAP about selling all or part of itself, Reuters reports, citing several sources.
Several other popular names such as Intel Corp, LG, Samsung are also reportedly cited as potential buyers of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB).
BlackBerry’s preliminary agreement
Last week, Fairfax Financial Holdings submitted a takeover agreement to BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB).
Sources close to discussions regarding Fairfax Financial Holdings Ltd conditional USD $9-a-share plan for a takeover of the company say the insurance and investment firm led by Prem Watsa has been surprised by the number of overtures from potential partners it has received in the past week.
Fairfax’s interest came on the heels of BlackBerry’s filing of its full fiscal second-quarter financial statements last Tuesday, after disclosing that the company lost $965-million in its second quarter, due to a major write-down of unsold smartphones.
Under the terms of the deal, Fairfax was supposed to deliver a merger agreement to the troubled smartphone manufacturer by Friday, failing which would reduce the time that Fairfax would be allowed to conduct its due diligence, which was originally supposed to end on November 4th. However, it is not yet clear whether this condition was met by the bidder.
Alternative to preliminary agreement
Nadia Damouni, Soyoung Kim and Nicola Leske of Reuters report the interest evinced by Cisco, Google and SAP signify an alternative to the preliminary agreement reached with Fairfax, which is BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s biggest shareholder.
According to the Reuters report, several analysts view the shrinking yet well-regarded services business of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), which powers its security-focused messaging system, would be worth $3 billion to $4.5 billion. Analysts also estimate BlackBerry’s assets could include a collection of patents worth $2 billion to $3 billion besides $3.1 billion in cash and investments.
The report also states private equity firms such as Cerberus Capital Management are reportedly seeking additional financial details about BlackBerry’s various business segments.
However, it was reported last week that Cerberus was not part of the consortium that Fairfax is putting together.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is advised by JP Morgan Chase & Co and RBC Capital Markets.