http://www.businessweek.com/news/2013-12-24/blackberry-former-ceo-lazaridis-cuts-stake-in-smartphone-maker

Bloomberg News

BlackBerry Founder Lazaridis Walks Away From Possible Takeover

December 25, 2013

BlackBerry Ltd. co-founder and former CEO Mike Lazaridis

BlackBerry Ltd. co-founder and former Chief Executive Officer Mike Lazaridis. Photographer: Aaron Harris/Bloomberg

BlackBerry Ltd. (BBRY:US) co-founder and former Chief Executive Officer Mike Lazaridis walked away from a possible takeover plan and reduced his stake in the struggling smartphone maker after it ended an attempt to sell itself.

Lazaridis now owns 26.3 million shares, or 4.99 percent of its outstanding shares, according to a regulatory filing yesterday. The former BlackBerry executive, who earlier this year had considered making a bid for the Waterloo, Ontario-based company, sold more than $26 million of stock this week, according to the filing. Together with co-founder Doug Fregin, he had controlled about 8 percent of the stock.

Following the collapse of a $4.7 billion buyout by Fairfax Financial Holdings Ltd. last month, BlackBerry ended its strategic review, opting instead to raise $1 billion in convertible debt and seek a new CEO. Former Sybase Inc. chief John Chen was named executive chairman and interim CEO. The $1 billion infusion helped stabilize the unprofitable company, giving Chen time to craft a turnaround plan.

Lazaridis and Fregin had hired Goldman Sachs Group Inc. and Centerview Partners LLC to evaluate their options for a possible deal. Yesterday, they terminated that agreement, according to the filing.

BlackBerry shares have lost 35 percent of their value this year amid plunging sales and mounting losses. Fregin owns about 2.3 percent of outstanding shares, according to yesterday’s statement.

Sales Slump

Revenue fell 56 percent to $1.19 billion last quarter. That missed the average estimate of $1.59 billion in a Bloomberg survey of analysts (BBRY:US). BlackBerry posted a loss from continuing operations of 67 cents. Analysts had predicted a loss of 46 cents.

Still, BlackBerry’s stock got a boost last week after the smartphone maker struck a five-year deal to have Foxconn Technology Group manufacture its devices. The partnership will help cut production spending and stave off the inventory gluts that have plagued the company.

Foxconn will make phones for BlackBerry at plants in Indonesia and Mexico. BlackBerry will own all of its intellectual property and handle quality assurance through Foxconn, an Apple Inc. supplier and the world’s largest manufacturer of electronic products. The shares jumped 16 percent after the announcement.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net; Nick Turner at nturner7@bloomberg.net


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus