October 12, 2013
Co-Founders Lazaridis, Fregin Contemplating BlackBerry Buyout
redOrbit Staff & Wire Reports – Your Universe Online
BlackBerry’s co-founders are reportedly expressing interest in re-assuming control of the troubled smartphone manufacturer formerly known as Research In Motion (RIM), various media outlets are reporting.
According to Rob Gillies of the Associated Press (AP), Mike Lazaridis and Douglas Fregin, who currently own eight percent of the company they originally founded in 1984, have filed paperwork with the US Securities and Exchange Commission (SEC) expressing interest in acquiring the remaining 92 percent of the company.
The duo has reportedly hired Goldman Sachs and Centerview Partners to help them explore their options and could team with other interested individuals in the takeover attempt, Gillies explained. They are the second investor group that has expressed a possible desire to acquire the troubled smartphone manufacturer. In September, it was announced Fairfax Financial Holdings, which owns nearly 10 percent of the Blackberry’s shares, had signed a letter of intent “contemplating” buying out the company for a reported $4.7 billion ($9 per share).
“In light of the issuer’s recent announcement that its board of directors has formed a special committee to explore strategic alternatives to enhance value and increase scale, the reporting persons are considering all available options with respect to their holdings of the shares, including, without limitation, a potential acquisition of all the outstanding shares of the issuer that they do not currently own, either by themselves or with other interested investors (an “acquisition”),” Lazaridis and Fregin said in the SEC filing, according to The Guardian.
BlackBerry, which reported a quarterly loss of nearly one billion dollars in September, was recently forced to eliminate 4,500 jobs, equivalent to 40 percent of its global workforce. The Waterloo, Ontario-based company had been counting on its delayed BlackBerry 10 operating system and its Z10 and Q10 handsets to rejuvenate sales. However, the sales performance of both models was underwhelming.
The company has until November 4 to consider an alternative to the Fairfax Financial offer. Sources with knowledge of BlackBerry’s affairs told Reuters the firm is also in talks with Google, Cisco Systems, and Germany's SAP AG, among other potential suitors. Discussions allegedly have centered around selling either the entire company, or parts of itself, though the news agency said the would-be buyers have declined to comment on the matter.
“Analysts believe [Lazaridis and Fregin] could look to secure financial backing from one or more of Canada's deep-pocketed pension funds,” Reuters’ Alastair Sharp said, adding that news of Lazaridis’ interest “pushed shares in the company a bit higher,” that the former co-founder had signed a confidentiality agreement with BlackBerry on Monday, and that the filing states he would become chairman of the company should their takeover bid be successful.
"It's his baby,” BGC analyst Colin Gillis told the AP in reference to Lazaridis. “If anyone is going to see value in the company it's him. He founded this company. I'm sure it's not pleasant to watch the spot it is in and he sees value in it. It must hurt to see reports that this thing is going to get ripped up and fed to the vultures.”