Cerberus Capital Management is seeking a confidentiality agreement that would allow it to examine the books and internal operations of BlackBerry, a person briefed on Cerberus plans said on Wednesday.
It was not clear whether the move would ultimately lead to a bid for BlackBerry, which reported a $1 billion quarterly loss last week largely because its new line of smartphones flopped.
The company has already agreed to a preliminary and conditional offer from its largest shareholder, Fairfax Financial Holdings of Toronto.
While it remains free to look for a better offer, BlackBerry would have to pay Fairfax $157 million if it accepts another bid before November 4.
Fairfax intends to bring only its 10 per cent holding in BlackBerry to its proposed transaction, which values the company at $4.7 billion. Scepticism about Fairfaxs ability to gather other investors and borrow billions of dollars more for what many view as a risky purchase has kept BlackBerrys shares well below the $9-a-share bid from Fairfax. Cerberus is a private equity firm known for its investments in distressed companies.
The break-up fee for Fairfax aside, it may be difficult for Cerberus to justify an offer higher than the one proposed by Fairfax. It is not known whether any other investors have expressed any interest. There is wide speculation in Canada that Mike Lazaridis, BlackBerrys co-founder and its former co-chairman and co-chief, may make a bid. Mr. Lazaridis still holds about 5.7 per cent of BlackBerrys shares. — New York Times News Service
