Board members from Samsung Electronics and Blackberry have engaged in talks over a potential buyout at $7.5bn, according to reports. South Korea’s Samsung allegedly proposed an initial price of between $13.35 and $15.49 per share; a premium as high as 60 percent over Blackberry’s current trading price. Following the initial report of the offer from Reuters, Blackberry’s shares soared 30 percent; its biggest share price gain in almost a decade.
Following the initial report of the offer from Reuters, Blackberry’s shares soared 30 percent
Canadian firm Blackberry has rejected various takeover offers in recent years in favour of a turnaround strategy launched by chief executive John Chen, national newspaper The Globe and Mail reports. Samsung’s interest in Blackberry is likely so it can get its hands on some 44,000 patents owned by the latter, which would position the South Korean firm better to compete with Apple and other rivals.
Blackberry was once a leader of the mobile market with a nearly 50 percent share in the late 2000s, but has since fallen from grace, having struggled to stay afloat in a fiercely competitive market. It now possesses less than one percent of that market share after touch-screen devices took off, largely led by Apple’s iPhone. Its revenues continue to decline, and although neither company has confirmed a sale at this point, analysts predict a buyout within two years. In December, Blackberry reported that it failed to meet targets yet again, with its revenue having fallen to $793m from $1.19bn a year earlier.
Samsung holds around a 25 percent share of the global smartphone market, while Apple takes 11 percent. The rise of cheaper Chinese rivals, such as Xiaomi and Lenovo, in recent years is making it more difficult for Samsung to see growth, but a Blackberry takeover and all the patents that come with it would potentially attract unwanted attention from the Competition Commission.