BlackBerry shares rose to their highest price in more than a month following reports of Lenovo Group CEO saying his company may eventually consider buying the smartphone maker.
Lenovo’s Yang Yuanqing told French financial newspaper Les Echos that a deal with Waterloo-based BlackBerry is possible. Bloomberg, who picked up the story, reports the CEO saying a deal “could possibly make sense, but first I need to analyse the market and understand what exactly the importance of this company is.”
Will a deal with Lenovo benefit BlackBerry? (Image credit: Getty Images)
Shares of BlackBerry rose by nearly 15 percent to $14.90 at the close of the trading session at the New York Stock Exchange, the company’s biggest gain in the market since February 4. The stock has climbed 26 percent this year overall, a big boost for the company, threatened by the meteoric rise of Android and iOS. Another reason attributed to the rise in share prices is the opening of pre-orders for the AT&T-bound BlackBerry Z10.
The remarks follow comments made earlier this year by the company’s Chief Financial Officer Wong Wai Ming, who told Bloomberg News that the company was “looking at all opportunities,” including BlackBerry. The embattled Canadian smartphone maker began a review of its options, including ones for strategic alliances or licensing out the software last year after losing market share to Apple and Samsung, raising speculation that it could be a takeover target.
In January, following Wong’s comments, BlackBerry CEO Thorsten Heins had said that the company was astounded by the Lenovo CFO’s remarks. “As always with these topics, we will talk about things when they are ready to be talked about and ready to be announced,” Heins said at the time. “There are other constituents in the process that need to be involved—if there would be anything.”
BlackBerry, formerly known as RIM, is in the process of preparing quarterly results on March 28, its first public financial announcement after the launch of the Z10 and the new BlackBerry 10 OS. The company’s CEO will be apprising investors on any developments in the strategic review. In the past, Heins has been quoted as saying that he did not rule out an acquisition of BlackBerry, while stressing that he’s more focussed on striking a licensing deal or forging some other strategic alliance that would involve less regulations. He said in January that he’s potentially open to licensing the new BlackBerry 10 software to other OEMs. “If OEMs come around and the business case makes sense as a whole, we would certainly consider it,” he said. “We’d not be prudent not to consider it.”
Any foreign bid for BlackBerry would obviously need regulatory approval from the Canadian government. The government automatically reviews all foreign takeovers of companies with assets valued more than US $335 million to determine whether the transactions are beneficial to the country as a whole.
Publish date: March 12, 2013 5:50 pm| Modified date: January 7, 2014 11:49 am