The smartphone maker, BlackBerry Ltd (NASDAQ:BBRY), working on its turnaround plan is the latest company to receive multiple acquisition proposals including one from Samsung Electronics Co Ltd (KRX:005930). However, the company is likely to turn down the acquisition offers for its turnaround bets.
According to the recent insider discussions, Samsung Electronics Co Ltd (KRX:005930) is said to have an interest in BlackBerry and the smartphone maker has made an acquisition offer of $7.5 billion for BlackBerry, as per the internal sources. Further, representatives from both the companies are said to have met last week to discuss the details of the transaction.
On the other hand, both the parties have denied such claims and while responding to the questions, a Samsung spokeswoman said, “Media reports of the acquisition are groundless.” A similar response was received from BlackBerry Ltd (NASDAQ:BBRY), which added that the company has “not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry.” The denial of any such deal triggered a downward rally of BlackBerry’s shares.
In addition to the deal from Samsung, the smartphone maker has turned down acquisition offers from multiple companies in favor of its multiyear restructuring strategy, as reported by Canadian newspaper Globe and Mail.
While talking about the acquisition deal from Samsung Electronics Co Ltd (KRX:005930), Brian Colello, Morningstar analyst, said,
“BlackBerry is in such transition today, so any investment has been a bet on the future, so at this point Samsung is cutting in before that full future becomes a reality.”
In addition to its somewhat effective turnaround strategy, BlackBerry Ltd (NASDAQ:BBRY) still holds a major grip over the corporate customers and customers often use it for security and business-oriented services. In addition to its corporate status, BlackBerry has a patent portfolio of 44,000 patents with net book value exceeding $1.43 billion.
The shares of BlackBerry Ltd (NASDAQ:BBRY) dropped nearly 20 percent closing at $10.10 in the last trading session.
This article has been written by Prakash Pandey.