More questions than answers behind Lazaridis’ interest in BlackBerry

Real bid or drumming up interest?

 
Research in Motion co-CEO Mike Lazaridis gestures at the end of his keynote address to the BlackBerry DevCon Americas conference in San Francisco, Oct.18, 2011. BlackBerry co-founders Lazaridis and Douglas Fregin are looking at making a potential takeover bid for the troubled smartphone maker THE CANADIAN PRESS/AP/Eric Risberg
Research in Motion co-CEO Mike Lazaridis gestures at the end of his keynote address to the BlackBerry DevCon Americas conference in San Francisco, Oct.18, 2011. BlackBerry co-founders Lazaridis and Douglas Fregin are looking at making a potential takeover bid for the troubled smartphone maker THE CANADIAN PRESS/AP/Eric Risberg

BlackBerry co-founder Mike Lazaridis caused a stir Thursday with the news that he’s considering a bid for the floundering tech company, but analysts point out that it’s still not clear what the future holds for the Canadian smartphone maker.

“It’s not unusual for company founders of ailing companies to jump back into the fray once they see their babies are sick,” said Kevin Restivo, an analyst with IDC Canada.

What’s unclear, said Restivo, is what this means for the bid framework outlined by Prem Watsa’s Fairfax Financial Holdings. Fairfax released details of a conditional takeover bid in late September, valuing BlackBerry as a whole at US$4.7 billion, with a share price value of US$9.

According to Bloomberg, Lazaridis, in conjunction with long-time friend and Research in Motion co-founder Doug Fregin, made a filing with the SEC on Thursday, indicating they are working with Goldman Sachs and Centerview Partners LLC to “study their options,” including any takeover offers for BlackBerry.

The filing said, “the two are “interested in pursuing a joint bid” with “the goal of stabilizing and ultimately reinventing the company.”

“On the surface, this bid seems to conflict with the Prem Watsa-Fairfax Financial bid, and considering how [Lazaridis and Fairfax] have cooperated in the past, it begs the question why this is being forwarded now considering the Fairfax bid is already there,” said Restivo.

If investors are going to get behind any of the proposals that have been put forward, they’ll require a lot more clarity on the matter, he added.

It’s also uncertain as to whether Lazaridis is simply trying to generate more interest and higher bids for BlackBerry with this filing, creating a larger pool of potential investors who might want to come forward with a better go-private offer.

“If Lazaridis and Fregin’s interest creates more of a market for BlackBerry, then that’s clearly good,” said Restivo. However, “whether that’s their intent or not, is unclear.”

Brian Modoff, an analyst with Deustche Bank Securities, said he’s lost count of the number of times someone has tried to generate interest in a higher bid for BlackBerry, and remains unconvinced that the value of its shares will rise to Watsa’s $9 valuation.

“We continue to have a sell rating because it’s our view that the $9 price he’s offering was too high for the value of the company,” Modoff said. “$6 is our price target.”

News of Lazaridis’ potential bid arrived the same day BlackBerry announced that it will be shutting the doors of its Halifax office in early January, eliminating about 350 jobs in the process.

Last month the company said it would be laying off about 4500 employees in total, following a second quarter loss of nearly US$1 billion.

BlackBerry also recently told Bloomberg it would be interested in breaking up the various aspects of its business, its enterprise services and patents, and selling them as separate entities.

With files from The Canadian Press.

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