BlackBerry board rejected break-up: report

Sale shelved to protect all stakeholders, insiders reveal

Tags: Blackberry (www.blackberry.com)CanadaMergers and acquisitions
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BlackBerry board rejected break-up: report BlackBerry’s board considered a dismantling of the company to be against the interests of stakeholders. (Getty Images)
By  Stephen McBride Published  November 10, 2013

BlackBerry's board resisted a break-up of the company, on the grounds that it was contrary to the interests of stakeholders, it emerged this weekend.

The ailing Canadian smartphone maker last week shelved a plan to sell itself amid reported interest from a number of contenders, including Microsoft, Lenovo and Apple, to acquire parts of the company.

According to a report from Reuters, insiders said the board considered a break-up of the business to appease a buyer would not be in the interest of shareholders, employees or suppliers. Also factoring in the possible resultant value-drop in any acquired patents, it opted for a $1bn convertible notes issue to a number of institutional investors, including BlackBerry's largest shareholder Fairfax Financial Holding and Qatar's sovereign wealth fund, Qatar Holding.

The u-turn sent BlackBerry stock into a tailspin last week that dragged its market capitalisation down 16% to under $3.4bn, representing a 96% drop from its 2008 peak of $80bn.

Since the mobility platform pioneer announced that it was exploring the option of a sale, most interested parties only pursued BlackBerry's intellectual property, including its network encryption and keyboard patents. The insiders said the board had considered the cost of closing down loss-making business units and felt that short-term stability was best served by the debt-funding option.  

New interim CEO John Chen, who replaces Thorsten Heins, has previously said he has no plans to dismantle BlackBerry's handset business.

1482 days ago
Vinod Mehra

Black Berry requires a strong partner to bail out. And this partner should be able to steer RIM to a new course else little more time it will lose more economic luster.

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