Facebook shows interest in acquiring Blackberry
Shares of struggling Canadian smartphone manufacturer BlackBerry Ltd. edged up after a report on Tuesday said Facebook executives met with the company to discuss a potential bid.
According to a report by The Wall Street Journal, BlackBerry executives flew to California to gauge the interest of representatives from the world’s largest social network sometime last week.
A potential bid would make the Menlo Park, Calif.-based company the latest in a growing line of potential buyers interested in the company’s financials ahead of its potential sale. However, it is unclear whether Facebook is interested in joining the fray. BlackBerry representative reiterated that the company’s Special Committee “is conducting a robust and thorough review of strategic alternatives,” and does not intend to disclose further developments until a transaction has been approved, or otherwise concluded the review.
A Facebook representative declined to comment.
An earlier agreement with Fairfax Financial Holdings Ltd., could have BlackBerry sold to its biggest shareholder for $4.7 billion, should a better offer not arise before Nov. 4. – the deadline for competing bids. However, Fairfax has yet to name additional backers or reveal a source of financing for the proposed sale.
The stock closed at $8.31, up 11 cents or 1.4 per cent in Toronto trading.
Since putting itself up for sale earlier this summer, BlackBerry has received varying degrees of interest from a number of potential suitors. The Wall Street Journal had previously reported that Chinese computer maker Lenovo had been mulling a takeover bid.
BlackBerry co-founders Mike Lazaridis and Douglas Fregin have also filed documents with the U.S. Securities and Exchange Commission indicating their interest in a potential bid. Other companies rumoured to be interested include Cerberus Capital Management LP, Google Inc., SAP AG, Samsung Electronics Ltd. and Cisco Systems Inc.
Unlike other rumoured bids, it is unclear where Facebook’s interest in BlackBerry might lie.
The social network has dabbled with a Facebook-branded phone in the past, partnering with Taiwanese smartphone maker HTC Corp. to create a new device specifically optimized for Facebook apps and services, dubbed the HTC First. It has also put considerable effort into a suite of Android apps intended to more deeply integrate Facebook services into thirdparty phones.
However, the company has shied away from talk that it may design, manufacture and distribute an entire phone on its own.
“We don’t want to build a phone or OS that only some people are going to be able to use,” chief executive officer Mark Zuckerberg said at an event in April, noting that such a device would only serve one to two per cent of the company’s 1.15 billion active users.
Analysts have previously speculated that BlackBerry’s hardware device business is the least lucrative of the company’s assets and would likely be shut down if the company were purchased as a whole.
Also on Tuesday, the company laid off another 300 employees at its headquarters in Waterloo, Ont. as part of broader cost-cutting measures. Black-Berry said in September that it would reduce its workforce by 40 per cent – about 4,500 people.