BlackBerry Is Said to Warm to Idea of a Breakup
BlackBerry (BBRY) Ltd. is more open to a breakup of the company amid concerns that Fairfax Financial Holdings Ltd. (FFH) may be unable to line up funding or partners for a $4.7 billion buyout, a person with knowledge of the matter said.
Context & Ripple Effects
BlackBerry's strategic review followed its 2012 restructuring preparations and an August decision to seek a buyer. A reported breakup would extend that process from a single-company sale toward transactions for individual businesses.
The company had already been reported to be weighing a BlackBerry Messenger spinoff, making a broader asset-by-asset approach a logical escalation rather than an isolated idea. The claimed funding difficulty at Fairfax remains unconfirmed.
First-order effects
- BlackBerry’s reported openness to a breakup gives Fairfax’s proposed $4.7 billion buyout a less exclusive path to a deal, while preserving alternatives for BlackBerry’s board.
- Potential acquirers can be considered for discrete BlackBerry operations rather than only for the entire company, if the reported shift becomes formal.
Second-order effects
- A partitioned sale process would force Fairfax to show that its financing and ownership plan offers greater value than bids for individual assets.
- Buyers interested in communications software or enterprise services gain a route to pursue targeted assets without taking responsibility for BlackBerry’s struggling handset business.
Third-order effects
- If strategic reviews increasingly separate software, services and hardware assets, distressed device makers may be valued less as integrated manufacturers and more as collections of saleable businesses.
- The episode points to financing certainty becoming as important as headline bid value in technology takeovers, particularly when a buyer proposes to acquire an entire company.
The trend: BlackBerry’s review is part of a shift from all-company rescues toward asset-level transactions when financing for a full buyout is uncertain.