BlackBerry may put itself up for sale

TORONTO - Reuters

BlackBerry said August 12, 2013 it is examining "strategic alternatives," including the possibility of selling off the firm. AFP Photo

Struggling smartphone maker BlackBerry is weighing options that could include an outright sale, it said on Aug. 12, and its largest shareholder is stepping down from its board to avoid any possible conflict of interest.

BlackBerry, which pioneered mobile email with its first smartphones and email pagers, said on Monday it had set up a committee to review its options, sparking a debate over whether Canada’s one-time crown jewel is more valuable as a whole or snapped up piece by piece by competitors or private investors.

The company said Prem Watsa, whose Fairfax Financial Holdings Ltd is BlackBerry’s biggest shareholder, was leaving the board as BlackBerry determines its next steps.

Canada’s Globe and Mail newspaper said Fairfax was talking to industry and private equity players about possibility taking BlackBerry private.

Other potential buyers of BlackBerry assets, if not the company itself, could include deep-pocketed Canadian pension funds, as well as some of its rivals.

BlackBerry, once a stock market darling, has bled market share to Apple Inc and phones using Google Inc’s Android operating system, and its new BlackBerry 10 smartphones have failed to gain traction with consumers.

BlackBerry’s assets include a shrinking, yet well-regarded services business that powers its security-focused messaging system, worth $3 billion to $4.5 billion; a collection of patents that could be worth $2 billion to $3 billion; and $3.1 billion in cash and investments, according to analysts.

BlackBerry’s fate is likely to involve the Canadian government, which vets foreign takeovers of domestic companies. The government said it would not comment on speculation, but a spokesman for Industry Minister James Moore said the government wished BlackBerry well in its search for new options.

Companies tipped as possible partners for BlackBerry have included Microsoft Corp and Amazon.com Inc, as well as Lenovo Group Ltd, where a senior executive said earlier this year the Chinese computer maker would consider a bid for BlackBerry to boost its own mobile business.

But Chinese involvement would trigger deep concerns about security issues from the Canadian government.