BlackBerry, Samsung Deny Report They’re in Talks About Deal (1)
2015-01-15 00:54:32.126 GMT
(Updates with investors wanting higher offer in sixth
paragraph.)
By Gerrit De Vynck and Jungah Lee
(Bloomberg) -- BlackBerry Ltd. and Samsung Electronics Co.
denied reports that they are in talks about Samsung potentially
acquiring the Canadian smartphone maker.
BlackBerry retreated after an earlier surge, falling as
much as 17 percent to $10.50 in late trading in New York.
Reuters, citing an unnamed person and documents, reported that
Samsung had recently approached BlackBerry with an initial offer
price of $13.35 to $15.49 a share, valuing the company at as
much as $7.5 billion. Reuters also said executives from the two
companies met last week to discuss a transaction.
The report is “groundless,” Samsung said in an e-mail.
BlackBerry said it’s “aware of certain press reports
published today with respect to a possible offer by Samsung to
purchase BlackBerry,” according to a statement. “BlackBerry
has not engaged in discussions with Samsung with respect to any
possible offer to purchase BlackBerry.”
The statement from Waterloo, Ontario-based BlackBerry
didn’t specify whether it had received a proposal from South
Korea-based Samsung.
BlackBerry gets offers all the time, according to a person
close to the company, who asked not to be identified discussing
private information. Investors would want a much higher takeover
price than what Reuters reported, the person said.
The reported purchase price would be at least a 37 percent
premium to BlackBerry’s closing price on Tuesday. BlackBerry
rose 30 percent to $12.60 at the close in New York Wednesday,
the biggest gain in more than a decade.
Just two months ago, BlackBerry announced it was teaming up
with Samsung, one of its biggest rivals in the growing mobile
device management market, for a management-services partnership.
It marked the first time the competitors have worked together on
a major product.
Turnaround Strategy
That partnership was one piece of Chief Executive Officer
John Chen’s efforts to focus BlackBerry on business users and
security as he aims to reach sustainable profit and revenue
growth in the fiscal year that ends in 2016. He already reached
a milestone of generating cash again in the most recently
reported quarter.
Samsung has “shown some interest in partnering with
BlackBerry recently,” said Desmond Lau, an analyst at Toronto-
based Veritas Investment Research Corp. Plus, “it’s much less
risky to buy a company that is not burning cash than having to
take over a company purely for its assets and technology and
then find a way to not lose money.”
BlackBerry shares rose 48 percent in 2014 as Chen’s
turnaround strategy started to take hold. They are still well
below the company’s heyday when the stock closed above $147 in
2008 before BlackBerry’s share of the smartphone market
dwindled.
Knox Partnership
Samsung’s Knox system, which offers a suite of secure work
applications, can now run on BlackBerry’s new server, known as
BES12. The partnership competes with an alliance of
International Business Machines Corp. and Apple Inc.
One question is whether the Canadian government would
approve the sale of BlackBerry to a foreign company. Canada
reviews foreign takeovers valued at more than C$354 million
($296 million) to determine if the deal represents a “net
benefit” to the country. The government can also review deals
based on national security considerations.
Jake Enwright, a spokesman for Canadian Industry Minister
James Moore in Ottawa, said he can’t comment on “speculation
and rumors.”
Canadian Finance Minister Joe Oliver declined to comment on
whether the government had received advance notice of an offer
for BlackBerry or whether it would allow a South Korean company
to acquire BlackBerry.
“I can’t comment on that specific situation,” Oliver said
Wednesday at a press conference in Vancouver. “Whatever
decisions that would be made under Investment Canada would be
reviewed by Minister Moore and the Cabinet.”
Chen took over in late 2013 after a plan collapsed to take
the smartphone maker private. Since then, Chen has focused on
providing software and security for governments and
corporations, while also introducing new phones that cater to
business users, like the Passport and the Classic.
For Related News and Information:
BlackBerry May Be Valued As If Still Smartphone King: Real M&A
BlackBerry Climbs on Report Samsung Made Acquisition Offer
BlackBerry’s Patent Portfolio Is Wireless Trove for Acquirer
Top Technology News: TTOP <GO>
--With assistance from Ian King in San Francisco, Greg Quinn in
Ottawa, Christopher Donville in Vancouver and Danielle Burger in
New York.
To contact the reporters on this story:
Gerrit De Vynck in Toronto at +1-416-203-5720 or
gdevynck@bloomberg.net;
Jungah Lee in Seoul at +82-2-3702-1642 or
jlee1361@bloomberg.net
To contact the editors responsible for this story:
Sarah Rabil at +1-212-617-5992 or
srabil@bloomberg.net
Andrew Pollack
2015-01-15 00:54:32.126 GMT
(Updates with investors wanting higher offer in sixth
paragraph.)
By Gerrit De Vynck and Jungah Lee
(Bloomberg) -- BlackBerry Ltd. and Samsung Electronics Co.
denied reports that they are in talks about Samsung potentially
acquiring the Canadian smartphone maker.
BlackBerry retreated after an earlier surge, falling as
much as 17 percent to $10.50 in late trading in New York.
Reuters, citing an unnamed person and documents, reported that
Samsung had recently approached BlackBerry with an initial offer
price of $13.35 to $15.49 a share, valuing the company at as
much as $7.5 billion. Reuters also said executives from the two
companies met last week to discuss a transaction.
The report is “groundless,” Samsung said in an e-mail.
BlackBerry said it’s “aware of certain press reports
published today with respect to a possible offer by Samsung to
purchase BlackBerry,” according to a statement. “BlackBerry
has not engaged in discussions with Samsung with respect to any
possible offer to purchase BlackBerry.”
The statement from Waterloo, Ontario-based BlackBerry
didn’t specify whether it had received a proposal from South
Korea-based Samsung.
BlackBerry gets offers all the time, according to a person
close to the company, who asked not to be identified discussing
private information. Investors would want a much higher takeover
price than what Reuters reported, the person said.
The reported purchase price would be at least a 37 percent
premium to BlackBerry’s closing price on Tuesday. BlackBerry
rose 30 percent to $12.60 at the close in New York Wednesday,
the biggest gain in more than a decade.
Just two months ago, BlackBerry announced it was teaming up
with Samsung, one of its biggest rivals in the growing mobile
device management market, for a management-services partnership.
It marked the first time the competitors have worked together on
a major product.
Turnaround Strategy
That partnership was one piece of Chief Executive Officer
John Chen’s efforts to focus BlackBerry on business users and
security as he aims to reach sustainable profit and revenue
growth in the fiscal year that ends in 2016. He already reached
a milestone of generating cash again in the most recently
reported quarter.
Samsung has “shown some interest in partnering with
BlackBerry recently,” said Desmond Lau, an analyst at Toronto-
based Veritas Investment Research Corp. Plus, “it’s much less
risky to buy a company that is not burning cash than having to
take over a company purely for its assets and technology and
then find a way to not lose money.”
BlackBerry shares rose 48 percent in 2014 as Chen’s
turnaround strategy started to take hold. They are still well
below the company’s heyday when the stock closed above $147 in
2008 before BlackBerry’s share of the smartphone market
dwindled.
Knox Partnership
Samsung’s Knox system, which offers a suite of secure work
applications, can now run on BlackBerry’s new server, known as
BES12. The partnership competes with an alliance of
International Business Machines Corp. and Apple Inc.
One question is whether the Canadian government would
approve the sale of BlackBerry to a foreign company. Canada
reviews foreign takeovers valued at more than C$354 million
($296 million) to determine if the deal represents a “net
benefit” to the country. The government can also review deals
based on national security considerations.
Jake Enwright, a spokesman for Canadian Industry Minister
James Moore in Ottawa, said he can’t comment on “speculation
and rumors.”
Canadian Finance Minister Joe Oliver declined to comment on
whether the government had received advance notice of an offer
for BlackBerry or whether it would allow a South Korean company
to acquire BlackBerry.
“I can’t comment on that specific situation,” Oliver said
Wednesday at a press conference in Vancouver. “Whatever
decisions that would be made under Investment Canada would be
reviewed by Minister Moore and the Cabinet.”
Chen took over in late 2013 after a plan collapsed to take
the smartphone maker private. Since then, Chen has focused on
providing software and security for governments and
corporations, while also introducing new phones that cater to
business users, like the Passport and the Classic.
For Related News and Information:
BlackBerry May Be Valued As If Still Smartphone King: Real M&A
BlackBerry Climbs on Report Samsung Made Acquisition Offer
BlackBerry’s Patent Portfolio Is Wireless Trove for Acquirer
Top Technology News: TTOP <GO>
--With assistance from Ian King in San Francisco, Greg Quinn in
Ottawa, Christopher Donville in Vancouver and Danielle Burger in
New York.
To contact the reporters on this story:
Gerrit De Vynck in Toronto at +1-416-203-5720 or
gdevynck@bloomberg.net;
Jungah Lee in Seoul at +82-2-3702-1642 or
jlee1361@bloomberg.net
To contact the editors responsible for this story:
Sarah Rabil at +1-212-617-5992 or
srabil@bloomberg.net
Andrew Pollack