Shareholders have yet to make their voices heard
When Canadian tycoon Prem Watsa announced last month that he was resigning from the board of BlackBerry, GoMo News rightly predicted that this could be a sign that he was planning to make a bid for the company himself. Now, with yesterday’s news confirming that BlackBerry’s directors have tentatively agreed to let him take the company private for just $4.7 billion (£2.9 billion), it remains to be seen if other shareholders feel they are being sold down the river. Prem owns 10 per cent of BlackBerry through his financial vehicle Fairfax Financial Holdings and has been given until November 4th to conduct due diligence on the deal, though in the meantime BlackBerry will remain officially on the market to rival bids.But it begs the question why, if BlackBerry’s board is willing to sell it off so cheaply, others such as Lenovo, IBM, Microsoft – to mention just a few – aren’t piling in with their own counter offers?
True, the company’s last hurrah into smartphones with its BB10 range doesn’t appear to be paying off. But what cannot be dismissed so easily are BlackBerry’s substantial, other assets.
As Prem himself wrote early this year, these include “a security system second to none, a distribution network across 650 telecom carriers worldwide, a 79 million subscriber base, enterprise customers accounting for 90 per cent of the Fortune 500, almost exclusive usage by governments in Canada, the US and the UK, and a huge original patent portfolio… ”
And that’s before you take into account the BlackBerry brand name, symbolising one of the earliest pioneers of the smartphone.
With all of this now being sold, it would seem, for a mere pittance, BlackBerry shareholders themselves may resist Prem’s overtures.
Last night (23rd September 2013) the company’s share price closed at just under $9, having rose nearly 2 per cent on the news that the manufacturer could be taken private.
But that’s still a long way from its peak in 2008 when BlackBerry was valued at more than 16 times that amount, with shares touching a record high of C$149.90 in June that year.
However that was a mere 12 months after Apple launched it’s first iPhone. The rest, as they say, is history..