Blackberry pushing government to change foreign ownership laws as they continue search for potential buyer

by Andrew Roach on September 12, 2013

Blackberry have been pushing hard to find a solution to their financial woes and it had been looking likely that a takeover was on the cards for the smartphone manufacturer.

Reports earlier this week suggested that former board member and Indian billionaire Prem Watsa was close to making a bid for the company through his Fairfax Financial Holdings firm but the bid could be set to hit rocky ground.

It’s being speculated that Watsa is struggling to get enough funding from domestic investors and would be unable to get enough backing from overseas due to the current limitations put in place by the federal government.

With executives desperate to try and find a buyer, senior executives at the company are preparing to convince the federal government to relax the laws surrounding foreign investment.

One of the problems facing Blackberry is that investors are increasingly becoming unsure about backing a company that
continues to lose ground on many of its rivals. Despite revamping the look and feel of their devices, the smartphone manufacturer has continued to lose ground to the likes of Android and Apple over the past few years.

With national backers looking increasingly unlikely to show interest in Blackberry, the firm’s special board committee has looked to see how foreign companies could get involved in a possible takeover.

But they would face a major hurdle with the Investment Canada Act which gives foreign investors a strict list to follow if they were to be involved in a possible takeover bid for any major company within Canada.

Alongside that, the government also have to manually approve any deal that is worth $C344 million and see whether the deal would be in the best interests of the nation,

At the moment, the most likely foreign investors look to be Chinese computer manufacturer Lenovo who had earlier shown interest in Blackberry back in January.

Given their reputation, Lenovo would certainly have the backing to help give Blackberry some much needed help in the smartphone market although the current laws would be a major deterrent to the Chinese firm.

It will now be up to Blackberry to see if their status as one of the biggest companies in Canada will be enough to let the government ease the restrictions on foreign ownership and let the smartphone manufacturer get the new funding they so desperately need.

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Blackberry's secure network could become a value asset to potential buyers —
September 16, 2013 at 5:46 am

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