BlackBerry may get rival buyout bid

Dylan Bushell-Embling
04 Oct 2013

BlackBerry may be struggling, but the curtain hasn’t closed on the company just yet.

Both the Wall Street Journal and Bloomberg have reported, citing sources, that Cerberus Capital Management is considering making a competing offer to Silver Lake’s tentative $4.7 billion buyout bid for BlackBerry.

The investment firm, which specializes in investing in distressed companies, reportedly aims to negotiate a confidentiality agreement with BlackBerry that would allow it closer access to the smartphone maker’s books.

According to the Journal, at least one other distressed investing company has also been exploring an offer.

BlackBerry’s largest shareholder Silver Lake is conducting due diligence on a $9-per-share offer to buy out the remainder of the company and take it private.

The size of the bid is subject to change after due diligence concludes, and BlackBerry investors are clearly not confident that the $9 offer will remain on the table. The company’s Nasdaq share price has fallen from $10.50 a few days before the Silver Lake deal was announced, to $7.73 at close of trade yesterday.

BlackBerry separately revealed it expects to incur costs of $400 million as part of its cost-cutting efforts, which involve laying off around 4,500 staff and selling off some factories and manufacturing gear.

This is around four times the company’s previous projection for the expenses involved in the cutbacks.

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