ABOVE: Queen’s University professor Dr. John Pliniussen discusses the options troubled Canadian tech giant Blackberry now faces
WATERLOO, Ont. – BlackBerry shares were up in pre-market trading after Canada’s flagship technology company said its board has launched a formal review of its “strategic alternatives” – including the possibility of selling the smartphone company.
The company says the review could result in BlackBerry forming joint ventures, strategic partnerships or a sale of BlackBerry. It didn’t specifically mention going private, an idea that has gained favour recently according to recent reports.
However, the long-anticipated formal strategic review – which will seek to get the best deal for BlackBerry shareholders – pushed up BlackBerry share prices.
The stock gained about seven per cent in pre-market trade, rising to US$10.50. The Canadian-listed shares closed Friday at C$10.05.
BlackBerry also announced Monday that Prem Watsa, the head of Canadian insurance company Fairfax Financial and one of BlackBerry’s key shareholders, has resigned from the BlackBerry board due to potential conflicts.
Watsa joined the board in early 2012 as part of attempts to revitalize the company, previously called Research In Motion, as its previous long-time co-CEOs stepped aside and installed Thorsten Heins as chief executive.
“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 a statement issued by BlackBerry.
The announcement comes amid unconfirmed reports that the Waterloo, Ont.-based company (TSX:BB) may go private – a move that could result in one or more investors buying out other shareholders and delisting the stock.
Heins said there are “compelling long-term opportunities” for the company’s products including a new generation of BlackBerry smartphones, the BlackBerry Enterprise Server and a new secure global data network.
“As the special committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network,” Heins said in a statement.
The strategic review will be headed by Timothy Dattels, who joined BlackBerry’s board last year and is a senior partner at TPG Capital, one of the world’s largest private equity firms. Among the company’s advisors is JP Morgan Securities.
“During the past year, management and the Board have been focused on launching the BlackBerry 10 platform and BES 10, establishing a strong financial position, and evaluating the best approach to delivering long-term value for customers and shareholders,” Dattel said.
“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.”