BlackBerry forms panel to weigh sale of company, other options

The big question surrounding BlackBerry this year was whether anyone would buy its new smartphones. Now the attention has turned to whether anyone will want to buy the beleaguered company.

BlackBerry surprised few people with its announcement Monday that it had formed a special committee to weigh strategic alternatives, including putting itself up for sale. After the Canadian device maker said in June that it lost $84 million in its last fiscal quarter and failed to gain enough traction with its new BlackBerry 10 smartphones, many tech analysts said the company’s days as a public stand-alone company were numbered.

The five-member special committee, which includes Chief Executive Thorsten Heins, said in a statement that options include “possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions.”

“Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” special committee Chairman Timothy Dattels said.

BlackBerry has gone down this path before. In March 2012 the company said it was looking into strategic options, but nothing came of it, noted BGC Financial analyst Colin Gillis.

The company is giving it another shot a year and a half later, but “we don’t see an obvious strategic buyer for the company, as Apple, Google and Microsoft all have their own platforms,” Gillis said. He noted that Dattels has experience with private equity, so BlackBerry might be able to form a group to take the company private.

“If that is possible, the company should do it, immediately,” Gillis said in a note to investors.

BlackBerry shares shot up more than 10% on Monday, ending the day at $10.78, up $1.02.

BlackBerry also announced that Prem Watsa, the chairman and chief executive of Fairfax Financial, was resigning from the board because of the possibility of conflicts. Fairfax Financial is BlackBerry’s largest shareholder and might be interested in buying the company.

“I continue to be a strong supporter of the company, the board and management as they move forward during this process, and Fairfax Financial has no current intention of selling its shares,” Watsa said in the statement.

In June, BlackBerry reported that it lost 4 million subscribers during the three months ended June 1. BlackBerry said it shipped 6.8 million smartphones during the quarter, which includes BlackBerry 10 devices and older models. That was down from 7.8 million in the year-earlier period.

Analysts were also disappointed by the company’s projections for another operating loss in the current quarter.

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