Cerberus Capital and Qualcomm Discuss Potential BlackBerry Bid

by Istvan Fekete on November 4, 2013

The buzz around BlackBerry is heating up, as three potential suitors have allegedly joined forces in a bid ahead of the Monday deadline for offers, reports the Wall Street Journal.

The news comes after one of BlackBerry’s largest shareholders struck a preliminary buyout deal with the struggling Canadian smartphone maker in September. BlackBerry’s advisers set about selling it to a wider group of possible buyers in an accelerated sales process designed to stop the smartphone maker’s fall.

According to the Wall Street Journal’s sources, Mike Lazaridis and Doug Fregin, who co-founded the company back in 1984 but no longer work at BlackBerry, have been in talks with the unofficial king of mobile phone chips, Qualcomm and Cerberus Capital Management LP, in a joint bid.

Bad news for BlackBerry, but maybe good news for those interested in bidding for the company: FairFax Financial Holdings Ltd – which has put an initial $4.7 billion offer on the table – still hasn’t lined up financing for its initial bid.

BlackBerry’s falling stock price suggests investors are skeptical that a deal will be reached between FairFax and the Canadian smartphone maker at $9 per share. Rumour has it investors aren’t confident the company will indeed strike a deal with any of the potential bidders.

The latest rumoured bid – from the trio mentioned above, which is obviously subject to change – could save BlackBerry from totally falling apart. A joint bid from the three does make sense from the following perspective.

First of all, Qualcomm, with $11.5 billion in cash according to the latest available numbers, could invest in BlackBerry to keep another customer afloat, although this sounds a bit like utopia. Another possible reason could be the patents, which sounds more plausible.

Cerberus is known for making investments in distressed companies, so BlackBerry wouldn’t be the first on its list.

On the other hand, Lazaridis and Fregin still own 8% of the company, which gives them an in improving the company’s future.

There were whispers about other potential buyers as well, with Lenovo being named as one. The latest buzz making waves in the tech world has been around a meeting between Facebook and BlackBerry executives.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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