Report: BlackBerry sale interest tepid, suitors want to carve up company

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A handful of private equity firms and other potential bidders are circling embattled phone maker BlackBerry (NASDAQ:BBRY), but interest is tepid and some buyers are expressing interest in parts of its business rather than the whole company, Reuters reports.

Sources familiar with the situation said BlackBerry's mobile operating system and keyboard-related patents are attracting the most attention from potential suitors. According to analysts, BlackBerry is worth a little more than $5 billion: Its services business--which powers its signature messaging system--is valued between $3 billion and $4.5 billion, and its patent library could be worth $2 billion to $3 billion. Those same analysts argue that BlackBerry's smartphone unit has little to no value, however, and believe that it could cost as much as $2 billion to shut down the division.

Last week, Reuters reported that BlackBerry's largest shareholder, Fairfax Financial Holdings Ltd., has approached several large Canadian investment funds about striking an agreement to take the company private. A few small private equity firms have signed confidentiality agreements and the sale process is expected to begin within the next several weeks, insiders said, noting that several larger investors and some Asian hardware makers have already decided against pursuing a deal.

BlackBerry declined to comment.

Last month, BlackBerry said its board of directors has formed a special committee to explore its strategic alternatives, including a possible sale. The Wall Street Journal subsequently reported that the company is considering a plan to spin off BlackBerry's signature Messenger chat service as a standalone unit: Sources said the subsidiary would be called BBM Inc., adding that BlackBerry is already transitioning executives to the BBM team and assigning engineers to expand the service beyond messaging. BlackBerry has already revealed plans to port BBM to Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android in the coming weeks, enabling BBM users to interact across multiple mobile operating systems.

BlackBerry sales slipped from 8 million in the second quarter of 2012 to 6.2 million in the most recent quarter, and its global market share plummeted from 5.2 percent a year ago to just 2.7 percent, Gartner reports. Sales of smartphones running Microsoft's (NASDAQ:MSFTWindows Phone operating system outpaced BlackBerry device sales for the first time ever during the second quarter of 2013, although both platforms still trail far behind Android and iOS, which combined to capture 93.2 percent of the worldwide smartphone market.

For more:
- read this Reuters article

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