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Cerberus Said to Join BlackBerry Founder to Explore Offer

Cerberus Capital Management LP, which has teamed up with BlackBerry Ltd. (BB) co-founder Mike Lazaridis to explore a bid for the struggling smartphone maker, is in talks with Qualcomm Inc. (QCOM) about having the chipmaker join the coalition, two people familiar with the talks said.

Qualcomm, based in San Diego, will make a decision after reviewing BlackBerry’s finances, said one of the people, who asked not to be identified because the talks are private. The company -- the top supplier of chips for phones and tablets -- gets the majority of its profit from licensing patents, which cover much of the fundamental technology in wireless networks.

BlackBerry, which announced in August that it was considering takeover offers, has drawn a number of interested parties, though little in the way of concrete bids. Fairfax Financial Holdings Ltd. (FFH), BlackBerry’s largest investor, signed a tentative agreement to acquire the smartphone maker for $4.7 billion in September -- without naming its buyout partners or showing that it has lined up financing.

Under that pact, BlackBerry has until Nov. 4 to consider other proposals while Fairfax and a group of investors conduct due diligence and line up financing. As of today, the firm has yet to arrange the financing, people with knowledge of the matter said. Fairfax’s advisers, Bank of America Corp. and Bank of Montreal, have been rebuffed by other lenders they contacted to help finance a bid, according to the people.

Photographer: Simon Dawson/Bloomberg

Cerberus Capital Management LP, which specializes in distressed assets, has informed BlackBerry of its intention to partner with Lazaridis and Fregin, the person said. Close

Cerberus Capital Management LP, which specializes in distressed assets, has informed... Read More

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Photographer: Simon Dawson/Bloomberg

Cerberus Capital Management LP, which specializes in distressed assets, has informed BlackBerry of its intention to partner with Lazaridis and Fregin, the person said.

Below Price

Investors have signaled that they don’t expect the Fairfax deal to happen, with the stock trading more than 10 percent below the $9-a-share offer.

Peter Duda, a spokesman for New York-based Cerberus, declined to comment, as did Qualcomm’s Emily Kilpatrick and BlackBerry’s Adam Emery. Mike Sitrick, a spokesman for Lazaridis, also declined to comment.

Cerberus, a private-equity firm that specializes in distressed assets, has already signed a nondisclosure agreement with BlackBerry to gain access to its financials, one of the people said.

BlackBerry fell 2 percent at $7.77 at the close in New York, bringing its year-to-date decline to 35 percent.

The Wall Street Journal previously reported that Qualcomm was considering joining in a BlackBerry bid.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net; Pui-Wing Tam at ptam13@bloomberg.net

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