Struggling smartphone maker BlackBerry is weighing options that could include an outright sale, it said on Monday (August 12), and its largest shareholder is stepping down from its board to avoid any possible conflict of interest.
BlackBerry, which pioneered mobile email with its first smartphones and email pagers, said on Monday it had set up a committee to review its options, sparking a debate over whether Canada's one-time crown jewel is more valuable as a whole or snapped up piece by piece by competitors or private investors.
The company said Prem Watsa, whose Fairfax Financial Holdings is BlackBerry's biggest shareholder, was leaving the board as BlackBerry determines its next steps.
Canada's Globe and Mail newspaper said Fairfax was talking to industry and private equity players about the possibility of taking BlackBerry private. Fairfax did not respond to requests for comment.
BlackBerry has bled market share to Apple and phones using Google Android operating system, and its new BlackBerry 10 smartphones have failed to gain traction with consumers.
BlackBerry shares rose more than 10 percent to $10.78 in New York and C$11.13 in Toronto in afternoon trading. But the shares remain well below their levels in June, before the company reported dismal results that included poor sales of the BlackBerry 10 that it viewed as key to a turnaround.
The share price peaked at about C$150 in June 2008, when BlackBerry, then known as Research In Motion, had a market capitalisation of more than $80 billion.
BlackBerry's assets include a shrinking, yet well-regarded services business that powers its security-focused messaging system, worth $3 billion to $4.5 billion, collection of patents that could be worth $2 billion to $3 billion, and $3.1 billion in cash and investments, according to analysts.
Even at a conservative estimate, that is more than the company's $5.4 billion market capitalisation, although analysts say the smartphones that bear its name have little or no value and it might cost $2 billion to shut the unit that makes them.
BlackBerry's fate is likely to involve the Canadian government, which vets foreign takeovers of domestic companies. The government said it would not comment on speculation, but a spokesman for Industry Minister James Moore said the government wished BlackBerry well in its search for new options.
Presented by Adam Justice