Abu Dhabi-backed Carlyle Group approached for BlackBerry bid
Former owner Lazaridis courts private equity firm
Carlyle Group, the US private-equity firm in which Abu Dhabi's Mubadala Development Company has a 7.5% stake, has been approached by Mike Lazaridis, the co-founder of BlackBerry who stepped down in last year, to launch a bid to buy the troubled smartphone company, it was reported at the weekend.
Lazaridis set up BlackBerry in 1985 but owns a 5.7% stake in the company, making him one of its largest individual shareholders. He left as co-chief executive in 2012 but has now approached private equity firms the Blackstone Group and the Carlyle Group, according to reports in both the New York Times and Wall Street Journal.
Lazaridis was not immediately reachable for comment and BlackBerry declined to comment, Reuters said.
The news comes as BlackBerry warned on Friday it expects to report a huge quarterly operating loss this week and that it will cut more than a third of its global workforce, rekindling fears of the company's demise and sending its shares into a tailspin.
The company, which has struggled to claw back market share from the likes of Apple's iPhone and Samsung Electronics' Galaxy phones, said it expects to report a net operating loss of between $950m and $995m in the quarter ended August 31, due to writedowns and other factors.
The results will put more pressure on BlackBerry to find a buyer for either some parts of the company, or for all of it. It said last month it is weighing its options, including an outright sale, in the face of persistently lacklustre sales of its new smartphones, which run on the BlackBerry 10 operating system.
"The company has sailed off a cliff," said BGC Partners analyst Colin Gillis. "What do you expect when you announce you're up for sale? Who wants to commit to a platform that could possibly be shut down?"
BlackBerry's Toronto-listed shares fell as much as 23.7% to C$8.25 on Friday, their lowest this year, before closing down 16% at C$9.08. The company's Nasdaq-listed shares ended 17% lower at $8.73, after falling as low as $8.01.
The company said it plans to shave its operating costs by some 50% over the next nine months, as it aims to focus its attention on the enterprise market and become a more niche player. But some analysts are skeptical that the company can cut its way back to prosperity.
"We believe the most likely outcome is a break-up or sale in total or in parts," UBS analyst Amitabh Passi told Reuters. A source at a potential suitor said the warning on Friday may speed up the sale process, but it also adds more risks. "I think most will view it as pretty scary. It's a melting ice cube," said the source.