What Company Will Buy BlackBerry?

A look at the fading pioneer's potential suitors and pricetag

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BlackBerry also owns QNX, the developer of embedded operating systems it acquired in 2010 for $200 million in order to rush BB10 to market. That QNX division still has value; as TechCrunch points out, its software powers roughly 60% of car infotainment systems globally.

And even as BlackBerry’s smartphone business shrinks, QNX continues to grow. Last week QNX announced it signed a partnership with Panasonic (PC) to develop new in-car infotainment systems for American, European and Japanese auto makers.

Then there’s the cash. BlackBerry is still sitting on $2.8 billion in cash and short-term equivalents.

With a market cap in the $5.5 billion range — and the expected premium to be paid on a purchase — there are very few companies that could afford to buy BlackBerry outright, even if they wanted to.

Chinese tech giant Lenovo (LNVGY) has been a rumored suitor in the past. With the success it had buying and turning around IBM’s PC business and its push into mobile, a BlackBerry purchase could even make sense. However, with BlackBerry still a big presence in highly sensitive government agencies in Canada and the U.S., the Canadian government will be under pressure to block any such deal.

Next, there’s still Prem Watsa and Fairfax Holdings (FFH), the equity firm that already holds 10% of BlackBerry shares. Watsa, who has been openly bullish on the company and its long-term prospects (paying an average of $17 per share for the stake), stepped down from BlackBerry’s board when the “For Sale” sign went up, citing a potential conflict of interest.

Considering BlackBerry had mused about going private just days before, the possibility Pensa might lead such a charge is not outside the realm of possibility.

Canadian pension boards buying BlackBerry is also a possibility. With the loss of Nortel and public concern about Canada falling behind the technology innovation game, there’s a desire in some quarters to prop up BlackBerry as a national asset. Pension boards certainly have the capital to do so and can be more patient than typical investors. Canada Pension Plan — which already holds 4.6 million shares in BlackBerry — has said it would “take a hard look” at a private BlackBerry.

Meanwhile, Quebec’s Caisse de depot de placement du Quebec (the pension plan for that province’s retirees that manages $180 billion in assets), also holds BlackBerry shares and has said it would consider investing if it were to go private.

At the end of the day, we still don’t know who might buy BlackBerry or for how much. BB10 came … and fizzled. So it seems unlikelythat  Blackberry — bleeding subscribers and losing market share — can continue making a go of things on its own.

However, the list of potential buyers is a short one and the company could ultimately be worth anywhere from its $5.5 billion market cap to more than double that if sold in pieces.

The one sure winner in any BlackBerry sale looks to be CEO Thorsten Heins. After being promoted to running the company, his salary rose to $1 million annually. If he manages to sell the company (at which point it’s assumed he would be replaced as CEO), he stands to collect a cool $55.6 million payout.

As of this writing, Brad Moon didn’t hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/who-if-anyone-might-buy-blackberry/.

©2014 InvestorPlace Media, LLC

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