Believe it or not, the almost-defunct BlackBerry Ltd (NASDAQ:BBRY) could about to be plunged into a bidding war. Has this been what Fairfax Financial has been hoping for all along, as some analysts have suggested?
Cerberus joins with BlackBerry co-founders
Dana Cimilluca and Dana Mattioli of The Wall Street Journal report that Cerberus Capital Management LP is close to an agreement to enter a bid for BlackBerry. The firm is said to be joining with two of the company’s co-founders: Mike Lazaridis and Doug Fregin. At this point it isn’t clear if others will join into this joint bid.
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We heard recently that Cerberus was said to have signed a non-disclosure agreement with BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) to look at its financial statements. Also a regulatory filing from Lazaridis and Fregin indicated in October that they were interested in submitting a bid or possibly joining with others in a bid for the struggling Canadian handset maker.
BlackBerry’s go-shop deadline nears
Fairfax Financial, BlackBerry’s largest shareholder, is leading a consortium which signed an early letter of intent with the company. That agreement included a go-shop period, during which Fairfax would conduct due diligence on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). The period ends on Monday, so the intent to submit a bid comes just in the nick of time. Fairfax’s offer is worth $4.7 billion or $9 per share.
According to The Wall Street Journal, there is still a chance that the offer from Cerberus, Lazaridis and Fregin might not surface, even if the group does officially form. However, if they do enter a bid, it could kick off a bidding war. Investors have clearly not been convinced that the $9 per share offer would go through, either with Fairfax or another group. Shares of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) have been trading far below that level for some time. The company’s market value is a little over $4 billion at this point.
Other possibilities for BlackBerry
There could even be more groups considering an eleventh-hour bid for BlackBerry. Lenovo Group Ltd. (PINK:LNVGY) (HKG:0992) has been said to be interested, and BlackBerry reportedly met with Facebook Inc (NASDAQ:FB) this week, although it’s doubtful whether the social network would even be interested in buying the company.