A handful of potential bidders, including private equity firms, are lining up to look at BlackBerry, but initial indications suggest that interest is tepid and buyers are eyeing parts of the company rather than the whole company, several sources familiar with the situation said.
Private equity firms are mostly interested in businesses such as BlackBerry’s operating system and the patents around its keyboard, two of the sources said. However, one possibility is for a Canadian pension fund to team up with an investor to buy the whole company, which is currently worth a little more than $5 billion, one of the sources said.
In recent days a few private equity firms have signed confidentiality agreements or have agreed to meetings with the company to gain access to the company’s books, the sources said, adding that the sale process was expected to start in a few weeks.
BlackBerry declined to comment.
The apparent lack of interest among private equity firms in the whole company underscores the challenges BlackBerry has been facing.
Industry sources said several of the biggest private equity firms and some of the Asian hardware makers had decided against a deal for the company. Still, the sources added some BlackBerry’s assets could be of interest to buyers.
According to analysts, BlackBerry’s assets include a shrinking, yet well-regarded servicesbusiness 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.
Even at a conservative estimate, that is more than the company’s $5.4 billion market value. Analysts said the smartphones that bear its name have little or no value and it might cost $2 billion to shut the unit that makes them.
Original article: BlackBerry bidders may want to break up business.
