The private equity firm Cerberus Capital Management is interested in a bid for troubled Canadian smartphone maker BlackBerry, a source familiar with the matter said on Wednesday.
The source indicated that the big investment group was preparing to sign a confidentiality agreement to examine BlackBerry’s finances for a possible counter-offer to a US$4.7 billion buyout plan agreed last month.
BlackBerry said on Sept. 23 it signed a letter of intent for the buyout, which translates to US$9 a share, led by Fairfax Financial Holdings Ltd. The deal is subject to due diligence by Fairfax and allows BlackBerry to consider other offers.
Fairfax, a Canadian firm headed by billionaire Prem Watsa, is already BlackBerry’s largest shareholder with approximately 10 percent of its shares.
Watsa resigned from BlackBerry’s board in August when it announced a search for a suitor.
Some analysts have said they do not believe the Fairfax buyout will take place, and that it was done to elicit other offers.
BlackBerry shares have been trading below the Fairfax offer of US$9, and on Wednesday edged up slightly to close at US$7.96.
However, an analysis released on Wednesday by the research firm Trefis said that BlackBerry is worth the US$4.7 billion offered by Fairfax, when adding up the value of its services, hardware and software operations and cash on hand.
BlackBerry had about US$2.6 billion in cash at the end of the past quarter. The company lost US$965 million in the past quarter as sales plummeted.
According to International Data Corp, BlackBerry’s global market share had slipped to 3.7 percent in the second quarter, the lowest since tracking began.
A survey by Kantar Worldpanel ComTech said BlackBerry captured just 2.4 percent of sales across the big five European markets and 1.8 percent in the US in the three months ending in August.
BlackBerry still has about 70 million subscribers worldwide, but most of these are using older handsets, with the newer devices on the BlackBerry 10 platform failing to gain traction.
New York-based Cerberus, which specializes in distressed companies, manages about US$20 billion in assets, according to its Web site. It was a lead investor in Chrysler before the automaker’s collapse in the financial crisis of 2008 to 2009.