South Korea based Samsung Electronics offered to purchase Blackberry Ltd recently for up to $7.5 billion seeking its patents as it continues to battle Apple according to one source familiar and documents leaked.
The proposed initial price range was between $13.55 and $15.49 a share, which represented a 38% to 60% premium over the current price of Blackberry, said a source Wednesday.
Executives at both companies, which being helped by advisers, met sometime last week to talk about the possible transaction, said the source, who requested anonymity due to the conversations being private.
The Canada based company announced in a prepared statement that it was not engaged in any talks with Samsung with respect to an offer to purchase the company.
Blackberry shares soared close to 30% following the report, but fell back 15% in trading after hours, following Blackberry’s statement.
In a separate report, Blackberry reportedly shunned a number of overtures for takeovers in the past few months as the company’s board and its largest investor believe the strategy for restructuring will give better shareholder value than any of the recent acquisition offers.
Blackberry’s board believes the offering prices, of which some are higher than $7 billion, fall far below the potential value of assets in the company over the upcoming few years.
Blackberry, at one time a darling of investors that pioneered smartphones, has recovered some of its swagger under CEO John Chen. The CEO is leading the company’s bid to retake market share that it lost to Samsung, Google and Apple.
The strength of Samsung as the No. 1 smartphone maker in the world was built on manufacturing devices for consumers, which in the past few years has become nearly saturated.
With an acquisition of Blackberry, the electronics giant could make more inroads in the corporate market, where to date it trails its biggest rivals.
One industry analyst asked the question of how many smartphones made by Samsung are found in offices.
Any agreement with Samsung would have to have Prem Watsa’s blessing. Watsa is a major shareholder in Blackberry through his company Fairfax Financial Holdings.
The company helped to bankroll Blackberry’s debt recapitalization that led to the arrival of Chen last November.
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