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Old 08-09-2013, 07:21 AM   #1 (permalink)
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Default BlackBerry Open to going Private

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Exclusive: BlackBerry open to going private, sources say | Reuters

(Reuters) - BlackBerry Ltd is warming up to the possibility of going private, as the smartphone maker battles to revive its fortunes, several sources familiar with the situation said.

Chief Executive Thorsten Heins and the company's board is increasingly coming around to the idea that taking BlackBerry private would give them breathing room to fix its problems out of the public eye, the sources said.

"There is a change of tone on the board," one of the sources said on Thursday.

No deal is imminent, however, and BlackBerry has not launched any kind of a sale process, the sources said. Even if it tried, BlackBerry could find it hard to come up with a buyer and the funding to go private. With the company still posting losses and bleeding subscribers, private equity firms and other buyers may not want to step up.

The company's shares have fallen more than 19 percent this year. Its market value has fallen to $4.8 billion, from $84 billion at its peak in 2008.

BlackBerry, which had been pinning its hopes for a turnaround on its new line of BlackBerry 10 devices, declined to comment. The sources declined to be named because these discussions are private.

BlackBerry's openness to consider a deal marks a radical shift in thinking at the once high-flying smartphone maker. Until recently, BlackBerry, formerly known as Research in Motion and a pioneer in providing secured emails on handheld devices, had been bent on staying independent, betting its turnaround on its latest smartphones.

Last month, Heins said the company was on the right track and just needed more time to fix its problems. He said the company will unveil more devices that run on the BlackBerry 10 operating system over the next eight months.

The company has also been looking at options such as licensing its BlackBerry 10 software and other partnerships.

Waterloo, Ontario-based BlackBerry has recently had discussions with private equity firm Silver Lake Partners about potential collaboration in enterprise computing, one of the sources said.

Silver Lake is caught in a bruising $25 billion battle to take Dell Inc private. Should it succeed in the Dell buyout, one possibility could be for it to collaborate with BlackBerry in mobile computing, where the PC maker has struggled to gain traction, the source said.

The talks with Silver Lake did not involve any buyout or other transaction-related discussions, the source said.

Silver Lake declined to comment.

Pressure is only increasing on the smartphone maker. BlackBerry 10 sales have come in well below some analysts' expectations, raising questions about whether the company can quickly win back market share from Apple Inc's iPhone as well as Samsung Electronics Co Ltd's Galaxy devices and other phones powered by Google Inc's Android operating system.

Some investors say the company must now look at all of its options, from a sale of the whole company to a sale of parts. Its valuable patent portfolio and high-margin services business could draw interest from technology companies.

But private equity firms have circled the company for more than two years and have tried without success so far to figure out ways to structure a deal.

Moreover, Ottawa reviews any big takeover of a Canadian company for competitive and national security reasons. Government officials have often said they want BlackBerry to succeed as a Canadian company, but concede they do not know how things will play out.

(Editing by Paritosh Bansal and Chris Gallagher)

Source: reuters.com
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Old 08-09-2013, 07:23 AM   #2 (permalink)
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Default Re: BlackBerry Open to going Private

They have put the company in play.
Replace one set of investors (shareholders) with another (the people/hedge funds/banks) willing to load billions to buy the stock.
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Old 08-09-2013, 07:39 AM   #3 (permalink)
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Default Re: BlackBerry Open to going Private

They would almost be forced to pay more than the book value of the stock. IF this were to happen, they would have to seek an injection of money from somewhere.

I disagree with your statement about hedge funds/banks. This move should have been done almost 5 years ago. I was working for a company that was public and went back to private. Best thing they could have done. Shareholders demand increased profitability with decreased risk. Banks and HFs don't give a sh|t what you do, as long as you remain solvent and pay back any loans or interest.
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Old 08-09-2013, 08:38 AM   #4 (permalink)
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Default Re: BlackBerry Open to going Private

The last line is key - they need to pay back the multi billion dollar loans. Cost cutting only goes so far.

They need to sell products or sell off businesses.
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Old 08-09-2013, 08:50 AM   #5 (permalink)
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Default Re: BlackBerry Open to going Private

I don't see how their cost cutting measures or their wanting to explore going back to a private model has to do with your post.

No one is disputing what they have to do (Just how they go about doing it), I am not even sure they can succeed anymore (without drastically changing the way they do business), so the point may be moot. Aside from the talk of licensing out some of their technology or going into a partnership with another tech company or selling off all/some of their business, I'm not sure what else they could be doing. It should be seen as a secondary indicator of what they may be planning (selling, licensing, etc...)

Heins says they need time (I can't comment on what he says they need) and like it or not, the only way to gain some time is to dump public model and go back to private.
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Old 08-09-2013, 02:04 PM   #6 (permalink)
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Default Re: BlackBerry Open to going Private

You are convinced that this is a good thing.
I believe it is a desperate act of a company that can't compete.

And that's that.
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Old 08-09-2013, 02:32 PM   #7 (permalink)
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Default Re: BlackBerry Open to going Private

No, it would have been a great thing, maybe 5 years ago. Now it the best option from a whole list of crappy ones.
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Old 08-09-2013, 04:40 PM   #8 (permalink)
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Default Re: BlackBerry Open to going Private

Agreed.
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Old 08-10-2013, 12:59 PM   #9 (permalink)
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Default Re: BlackBerry Open to going Private

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Originally Posted by ZombieBerry View Post
No, it would have been a great thing, maybe 5 years ago. Now it the best option from a whole list of crappy ones.
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Having done some M&A in the past, how would you even value them? Financials continue to drop, IP loosing value monthly, total addressable market lost in North America and Western Europe, and hardware segment a commodity (just look at HTC). Forget about any traction in China as well.

I can't see anyone even getting as far as due diligence to possibly acquire them.
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Old 08-12-2013, 11:26 PM   #10 (permalink)
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Default Re: BlackBerry Open to going Private

may be Microsoft will install Win8 on these device- thats called strategic partnership? or thats sold-sold? Looks like mass does not want keyboard right now, but i feel that people will come back to base models some day, could be 2-3 yrs.
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Old 08-13-2013, 07:20 AM   #11 (permalink)
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may be Microsoft will install Win8 on these device- thats called strategic partnership? or thats sold-sold? Looks like mass does not want keyboard right now, but i feel that people will come back to base models some day, could be 2-3 yrs.
Doubtful on all counts.
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Old 08-13-2013, 06:51 PM   #12 (permalink)
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Default Re: BlackBerry Open to going Private

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Doubtful on all counts.
You don't hang out a public for sale sign unless you've exhausted all private negotiations (assuming they ever had any). It's the equivalent of yelling for a life vest after you have started to go underwater.
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Old 08-14-2013, 05:52 AM   #13 (permalink)
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Default Re: BlackBerry Open to going Private

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Originally Posted by bostonnerd View Post
You don't hang out a public for sale sign unless you've exhausted all private negotiations (assuming they ever had any). It's the equivalent of yelling for a life vest after you have started to go underwater.
Agreed.

I was disputing the statement that Microsoft would put Windows Phone 8 on BlackBerry hardware or that people will come back to BlackBerry in 2-3 years.
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Old 08-14-2013, 09:41 AM   #14 (permalink)
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Default Re: BlackBerry Open to going Private

Poor management has caused many good companys to dive and Blackberry is just another one. Unless share holders demand the elimination of the people on top it's a lost cause. Apple is now being looked at for the same reasons, lack of thought. Jobs built things that he thought people would like and then worried about cost. He made billions for Apple. RIM did the same basic thing, build a good secure cell phone with features that business and a segment of the consumer group would want. RIM management changed and they concentrate on the same thing a lot of companys are only looking at ...only the bottom line. They forget how and why they got to the top. RIM did it and now APPLE is doing it. Can they rebuild? Maybe.
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