BlackBerry Could be Sold Off in Fragments as Bidders Remain Skeptical of the Whole
September 16, 2013 9:50 AM
Bidders just want the valuable patents
A few bidders are eyeballing struggling phone company
, but no one seems to want to buy the company as a whole.
According to a new report by
, bidders interested in a BlackBerry sale are more interested in buying parts of the Canadian company rather than the whole thing. Among the potential bidders include private equity firms, who see BlackBerry's current position in the mobile market as too much of a challenge to buy the entire company -- which is valued at around $5.4 billion USD.
The private equity firms and other bidders are particularly interested in BlackBerry's operating system and the patents for its keyboard. Taking BlackBerry's more valuable parts makes more sense than taking on its troublesome whole.
broke down BlackBerry's market value by $3 billion to $4.5 billion for its security-based messaging system; $2 billion to $3 billion for a collection of patents, and $3.1 billion in cash and investments. Meanwhile, the company's hardware has little to no value, and could even cost $2 billion to shut down. In total, this is clearly more than its $5.4 billion market value.
Other options for the sale include a Canadian pension fund joining an investor to buy the whole company.
Fairfax Financial Holdings Ltd, BlackBerry's biggest shareholder, has sought many large Canadian investment funds in hopes of taking the company private as well.
A lot of BlackBerry's troubles stem from the struggle to stay relevant in a mobile market dominated by Apple's iPhone and Samsung's Galaxy line. It launched its BlackBerry 10 (BB10) operating system and line of devices back in January as an attempt to stay competitive, but so far, it's been a flop.
Reports have said that the BB10 flagship devices --
the Z10 and the Q10
-- have failed to stir any enthusiasm in the U.S. and Canada.
Earlier this month, the company's board of directors announced the formation of a Special Committee to
explore strategic alternatives
to enhance the value and accelerate the development of BB10. The announcement came only a few days after a
that BlackBerry might go private in an attempt to fix its problems away from the public. The company was also open to a sale.
Last month, reports said that BlackBerry executives were considering
of its messaging service BlackBerry Messenger (BBM).
To make matters worse, the company
axed more than half
of its sales force last week.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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