Technology

BlackBerry Ltd, Samsung Deny Any Acquisition Talks

BlackBerry and Samsung rejected rumors that the South Korean company is in talks to acquire the Canadian smartphone maker. After spiking initially, Blackberry shares tumbled by around 17% to $10.50 in late trading on the NASDAQ.

BlackBerry Ltd, Samsung Deny Any Acquisition Talks

BlackBerry, Samsung deny acquisition talks

Reuters, citing an anonymous source, reported yesterday that Samsung held a meeting with BlackBerry and offered a buyout price of $13.35 to $15.49 per share, valuing the company at as much $7.5 billion. Additionally, Reuters said that executives from both parties met last week to discuss the transaction.

However, Samsung, in an email to Bloomberg, denied the report outright, saying it is a “groundless” report. On the other hand, BlackBerry said it is aware of the few press reports published regarding the offer by Samsung to acquire BlackBerry. The company said, “BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry.” In its statement, BlackBerry did not come clear whether or not it has received any such proposal from the South Korean firm.

Desmond Lau, an analyst at Toronto-based Veritas Investment Research Corp. Plus, told Bloomberg that Samsung seems to be interested in partnering with BlackBerry recently. The analyst added that it involves lesser risk to buy a company that is not “burning cash” rather than “a company purely for its assets and technology and then find a way to not lose money.”

Focus on business customers and security

Only a couple of months ago, BlackBerry announced that it was partnering with Samsung to expand in the mobile device management market. BlackBerry chief John Chen is designing strategies to focus on business users and security to maintain profit levels and revenue growth in the fiscal year that ends in 2016. Chen has already attained the milestone of generating cash gain in the most recently reported quarter.

A source close to the Waterloo, Ontario-based company said the company gets various proposals regularly, according to Bloomberg. The source added that investors would be hoping for a much higher takeover price than the one reported by Reuters. The price mentioned in the report is around a 37% premium to BlackBerry’s closing price on Tuesday.

BlackBerry spiked around 30% to $12.60 at the close in New York Wednesday, which is the highest gain in more than a decade.