With growing concerns by both BlackBerry and a Canadian investment firm that a sale of BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB) to a Canadian interest is growing increasingly unlikely, BlackBerry has announced its intention to lobby Canadian lawmakers to look into the Investment Canada Act. The government automatically reviews any takeover bid of more than C$344 million ($332 million).
Fairfax is facing a daunting task
BlackBerry’s largest shareholder, Toronto’s Fairfax Financial Holdings Ltd (TSE:FFH), is facing a daunting task if it wishes to see BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB) acquired by outside interest domestically. The investment firm is talking to Canadian pension fund managers but has yet to make much headway according to a person with knowledge of the discussions.
“Why would Canadian pension plans buy this thing?” said John O’Connell, chief executive officer with investment firm Davis Rea Ltd. in Toronto, a neutral party given that they hold no stake in BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB) or Fairfax. “There’s no indication that this business has bottomed, and every indication to show they continue to lose market share.”
Efforts to find some leniency in the Investment Canada Act is key to shopping the company around to potential foreign buyers that include Microsoft Corporation (NASDAQ:MSFT) and Lenovo Group Limited (OTCMKTS:LNVGY). Until some change is facilitated, talks with either company would struggle to bear any fruit given the review process that a potential foreign acquisition would trigger.
On the surface, one might think that Microsoft Corporation’s acquisition of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) would lessen its interest in BlackBerry, but the pairing of the two might allow Microsoft to roll up smaller competitors and come back with a product that combines the strengths of the three companies in an effort to compete with both Android and iOS devices. Microsoft is looking to devices to boost sales rather than its bread and butter business, software.
Lenovo Group Limited (OTCMKTS:LNVGY), the world’s largest personal-computer maker, said in January that it was assessing potential acquisition targets, including BlackBerry. However, BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB) operates a number of secure U.S. and Canadian government servers that would seem to make any bid from the China-based Lenovo impossible.
Fairfax holds a stake in BlackBerry of nearly 10%
Fairfax, which holds a stake in BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB) of nearly 10% as of June 30th, has held talks with some of Canada’s largest pension plans, reporting a “cool” reception.
While BlackBerry Ltd (NASDAQ:BBRY)(TSE:BB)’s stock saw gains towards the end of 2012 when it rolled out the Blackberry 10, the stock has lost the ground it gained (and some) on weaker than expected sales reported in May.
