BlackBerry Ltd. (BB), the struggling smartphone maker looking to sell itself, has drawn interest from private-equity firm Cerberus Capital Management LP, according to a person with knowledge of the matter.
Cerberus is looking to sign a confidentiality agreement with BlackBerry that would give it access to additional financial data, said the person, who asked not to be identified because the negotiations are private. Cerberus’s interest in BlackBerry, which may not lead to a bid, was reported earlier by the Wall Street Journal.
BlackBerry’s largest shareholder, Fairfax Financial Holdings Ltd. (FFH), made a tentative offer on Sept. 23 to buy the company for $4.7 billion, saying it was leading a group of investors. Fairfax didn’t disclose the name of its partners and hadn’t yet lined up financing at the time, raising concern that the deal would fall through.
BlackBerry slid 2.9 percent to $7.73 at the close in New York, leaving it well below Fairfax’s $9-a-share bid. Even with the takeover speculation, the stock has dropped by 35 percent this year, dragged down by the company’s dimming sales prospects and mounting losses.
Cerberus would bring expertise dealing with troubled companies. The New York-based firm, which manages more than $20 billion in assets, invested in automaker Chrysler in 2007 and led a group that acquired grocery-store chains from Supervalu Inc. (SVU:US) earlier this year.
Some of Cerberus’s investments have been difficult to turn around. In 2005, the firm agreed to pay $2.3 billion for NewPage, which makes coated covers for magazines. NewPage filed for bankruptcy in 2011 as it struggled with a shift of readers online. Cerberus’s investment in Ally Financial Inc. (ALLY:US), which was then known as GMAC Inc., suffered from the sluggish economy and its holding was diluted by a government rescue plan.
Adam Emery, a spokesman for Waterloo, Ontario-based BlackBerry, declined to discuss any talks that may be under way.
“We do not intend to disclose further developments with respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives,” Emery said.
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