Anything’s possible, but the emerging consensus among analysts is that BlackBerry is unlikely to prove an attractive takeover target.
Indeed, the company’s announcement on Monday that it is exploring “strategic options” all but confirms that view. Certainly, it demonstrates a lack of interest in the $5.4 billion former smartphone trailblazer; presumably BlackBerry wouldn’t have to advertise for a buyer or partner if it weren’t having difficulty finding one.
But now that it is, analysts are at a loss to explain exactly who would want to buy BlackBerry outright, and why.
“We struggle to see who might buy BlackBerry given the ongoing turnaround challenges,” Nomura’s Stuart Jeffrey writes. “Any bidder would likely have to be proficient in company turnarounds to generate value from a BlackBerry acquisition. Few companies in tech seem to have that skill set, with most focused on technology acquisitions only.”
Mike Walkley of Canaccord Genuity just doesn’t see it, either. “… We struggle to identify potential buyers that would pay a premium to the current share price,” he said on Monday.
What about Samsung, Lenovo, or Microsoft, three companies that have occasionally been fingered as possible BlackBerry acquirers in the past? Wells Fargo analyst Maynard Um suspects that their names will likely pop up again in the months ahead, but doubts anything will come of it. “We expect many companies will take a look even though they may not all be truly interested bidders,” he wrote in a note to clients.
Sadly, that may well prove to be the case. BlackBerry’s precipitous downfall, mercilessly hurried along by Google and Apple, has left it with seemingly little opportunity for recovery, and ever-dwindling options for redemption. Much as the company’s leadership would like the world to view its announcement of a strategic review as yet another new beginning, it’s looking increasingly like one more chapter in the same sort of long, sad ending that felled Palm — another pioneer taken off guard by an industry disruption it recognized too late, and ruined by its own hubris.
BlackBerry’s best hope: Prem Watsa’s Fairfax Financial pulls together that private equity buyout it’s working on. Otherwise, it may be headed for a piecemeal sale; its patent portfolio and enterprise device management business are obviously valuable to someone. The question is who, and at what price.
It’s worth noting that the question of who might acquire BlackBerry is not an entirely new one. It was the subject of some discussion back in 2011 when the company was rumored to be a takeover target. And sadly it’s just as difficult to answer now as it was then. As I wrote in June of 2011, “[BlackBerry's] not a takeover target if no one wants it.”
[BlackBerry's] hopeless downward spiral is the result of missteps and flaws that go way beyond its inability to meet guidance. [BlackBerry] has failed to innovate. It has failed to execute. It has failed to understand the consumer market, which is increasingly informing enterprise support and purchasing decisions. And its comedy-of-errors management has consistently refused to take responsibility for those failures, because it doesn’t seem to see them as a problem.
Is there anyone willing to spend $15 billion plus premium on that? The chance to turn around [BlackBerry's] foundering business? The chance to arrive late-to-market with another ill-conceived BlackBerry? To make sense of the BlackBerry OS-to-QNX transition? And then to go head-to-head with Apple and Google, which have been wiping the floor with newcomers and pioneers both?
Seems highly unlikely.