On Wednesday, 14th January, 2015, CNBC reported that as per Reuters, Samsung had offered Blackberry Ltd (NASDAQ:BBRY) $7.5 billion in a bid to take over the ailing mobile manufacturer. In response to the excitement generated, share value of Blackberry shot up by a whopping 30% and was poised at $12.59 per share. For the benefit of those who have lost touch with Blackberry, this value was the highest that the company has seen over the last 11 years, the last being on December 23rd, 2003.
However, the happiness was short-lived as both Blackberry Ltd (NASDAQ:BBRY) and Samsung trashed the Reuters reports. While Samsung labeled it as being ‘groundless’, Blackberry issued the following statement –
“BlackBerry Limited is aware of certain press reports published today with respect to a possible offer by Samsung to purchase BlackBerry. BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. BlackBerry’s policy is not to comment on rumors or speculation, and accordingly it does not intend to comment further.”
Reuters, on its part, refused to disown its report and claimed that not only was it aware of meetings being attended by executives of both companies but had seen documents pertaining to the same too.
Taking a deeper look into this news/rumor, it would indeed make sense for Samsung to take over Blackberry Ltd (NASDAQ:BBRY), especially since the Korean giant is exploring options that would provide it with the much-needed cutting edge over its rivals. Security could of course feature as one of the primary reasons and this is one aspect wherein Blackberry’s devices are regarded as being the most trustworthy, even by the American President.
If Blackberry Ltd (NASDAQ:BBRY) has truly repulsed Samsung, the Korean giant is not the first since the phone manufacturer has rejected multiple take-over bids in the past. It describes itself as being in transition wherein subsequent to re-structuring it hopes to be in a position to deliver higher returns to its share-holders.
This article has been written by Vinita Basu.