BlackBerry shares jump nearly 30% after reported Samsung offer

Shares fell again after BlackBerry said claims of an acquisition were 'groundless'

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The Independent Online

Shares in BlackBerry rose as much as 30 per cent following reports that Samsung has offered the buy the telecoms company.

However, the Canadian-based firm has since denied the claims, saying in a statement that it "has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry".

Shares in BlackBerry soared nearly 30 per cent to $12.63 off the back of the news, before falling back around 15 per cent in after-hours electronic trading following the statement.

A person familiar to the matter told Reuters on Wednesday that the South Korean electronics firm had recently offered to buy BlackBerry for as much as $7.5 billion, seeking its valuable patents as it battles Apple in the corporate market.

Samsung proposed an initial price range of $13.35 to $15.49 per share, representing a premium of 38 per cent to 60 per cent over BlackBerry's current trading price, the source said.

The person added that representatives from the two companies, which are working with advisers, met last week to discuss a potential transaction.

But Samsung also told Reuters in Seoul that it has no plans to acquire BlackBerry. "Media reports of the acquisition are groundless," a company spokeswoman said.

 

Meanwhile, Canadian newspaper Globe and Mail reported that BlackBerry has turned down a handful of takeover offers in recent months as its board and largest investor think its restructuring strategy will deliver greater shareholder value than current acquisition offers.

According to the report, the board believes offering prices, some in excess of $7 billion, fall well below BlackBerry's potential asset value in the next few years.

In the third quarter, revenue at BlackBerry, which is increasingly focusing on providing services like secure corporate networks, fell to $793 million from $1.19 billion a year earlier, falling short of analysts' expectations of $931.5 million

The offer price would imply an enterprise value of $6 billion to $7.5 billion for BlackBerry, assuming conversion of $1.25 billion of convertible debt, according to the documents seen by Reuters.

Any bid would also face regulatory scrutiny in both Ottawa and Washington. Under Canadian law, any foreign takeover of BlackBerry would require government approval under the Industry Canada Act.

BlackBerry's secure networks manage the email traffic of thousands of large corporate customers, along with government and military agencies across the globe.

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