Original URL: https://www.theregister.com/2013/11/09/blackberry_board_rejected_breakup_offers/
BlackBerry board swatted away offers to break it up, sources claim
Vowed they would only go down the drain together
Posted in On-Prem, 9th November 2013 00:29 GMT
Despite all of the parties that were said to be interested in acquiring pieces of stricken smartphone vendor BlackBerry, breaking up the company was never an option that was on the table, sources claim.
The Canadian firm spent six weeks trying to sell itself off but ultimately failed. Instead, it ended up with nothing more than a $1bn bailout deal from a consortium of investors led by Fairfax Holdings, which ultimately couldn't raise the money to fund its own takeover bid.
Not that there was any shortage of potential suitors. A whole host of companies reportedly stepped up to the bargaining table with BlackBerry, including Apple, Cisco, Google, Lenovo, and Microsoft, among others.
The trouble is, many of them were only interested in plucking the choicest pieces of the flailing firm, such as its patent portfolio or its mobile device management software business. Few, if any, expressed much interest in continuing BlackBerry's smartphone business, which is widely perceived as having reached a dead end.
But BlackBerry's board had no intention of allowing the company to be carved up like a roast, Reuters reports, citing several sources who wished to remain anonymous. Such a move would not benefit all of BlackBerry's stakeholders, they felt – including not just investors, but the company's employees, customers, and suppliers, as well.
Selling off some pieces of BlackBerry could force it to wind down other areas of its business, the board felt, which could have damaged its relationships with suppliers and also potentially reduced the value of its intellectual property.
The board reportedly also worried that striking big deals with foreign companies to dismantle itself would run it afoul of the Investment Canada Act, a law that empowers the Canadian government to block substantial foreign investments if they do not present "a net benefit to Canada."
Such scrutiny, if it came, would surely slow down the deal and would make it harder for BlackBerry to stanch its ongoing losses as its customer base flees to other smartphone platforms.
That may be why BlackBerry ended up scrapping the buyout idea and tossing out CEO Thorsten Heins in favor of John Chen, former chief exec of Sybase, who swears he has no intention of putting BlackBerry's smartphones on the chopping block.
Even so, Reuters' sources claim that BlackBerry's board hasn't actually ruled out any options, including selling the company off in pieces. The decision not to break it up this time around was made based on current conditions only, they say – although they add that any future offers for BlackBerry, in whole or in part, "will likely be measured by a similar yardstick." ®