x Abu Dhabi, UAEFriday 21 July 2017

BlackBerry co-founder ‘holds talks’ with investors about joint bid

One of BlackBerry’s co-founders has reportedly held talks with private equity firms about making a joint bid for the struggling Canadian smartphone maker.

One of BlackBerry’s co-founders has reportedly held talks with private equity firms about making a joint bid for the struggling Canadian smartphone maker.

Quoting people familiar with the matter, The Wall Street Journal reported on Saturday that the former Blackberry co-chief executive Mike Lazaridis has talked to firms including Blackstone and Carlyle.

Mubadala is an investor in Carlyle.

The report came just a day after Blackberry said it would cut 4,500 jobs, or 40 per cent of its workforce, in the face of hefty losses and weak sales of its new handsets.

Mr Lazaridis and co-founder Jim Balsillie handed over the reins of the company in January last year under pressure from shareholders unhappy with the company’s performance.

News of the layoffs showed BlackBerry’s efforts at reviving its fortunes are a stunning failure and push the once high-flying firm a step closer to extinction, analysts said.

BlackBerry said it expected a loss of US$950 million to $995m in the second quarter mostly owing to writedowns linked to poor sales of its Z10 smartphone, the device aimed at competing against Apple and Android devices.

The company’s highly-publicised launch of the BlackBerry 10 platform earlier this year failed to ignite sales. BlackBerry has said it is examining “strategic alternatives”, including a possible sale of the company.

Still, BlackBerry continues to offer new products. Last week the firm introduced the Z30, a model with the company’s largest screen yet. The device goes on sale in Britain and the Middle East in the next few days.

BlackBerry said last month that it was forming a special committee to evaluate its strategic options, including a potential sale of the company.

A team of accountants and lawyers from New York-based PricewaterhouseCoopers have been working at BlackBerry since last month, Bloomberg reported.

The smartphone maker previously hired Perella Weinberg Partners as an adviser – alongside its bankers at JPMorgan – to help explore its options, a person familiar with the decision said earlier this month.

Fairfax Financial, BlackBerry’s largest shareholder, has talked to Canadian pension fund managers to try and build support for a takeover deal, according to a person with knowledge of the discussions.

“It appears the only option BlackBerry has is to ultimately sell itself,” said Neeraj Monga, an analyst at Veritas Investment Research in Toronto.