BlackBerry shares rise on report Cerberus may wish to bid – Reuters

Toronto; Wed Oct 2, 2013

(Reuters) – A report of a possible second expression of interest in BlackBerry Ltd reversed a stock price slide on Wednesday, after the struggling smartphone maker announced $400 million in pre-tax charges related to cuts announced last month.

The Wall Street Journal, citing people familiar with the matter, said BlackBerry has attracted interest from firms, including Cerberus Capital Management LP, that specialize in distressed investing.

Cerberus aims to sign a confidentiality agreement with BlackBerry that would allow it to access private financial information, but it might in the end not bid, the Journal quoted one of its sources as saying.

BlackBerry shares were up just over 1 percent, reversing a 5 percent fall from earlier in the session. The stock, at about $8 in the early afternoon, remains well below the tentative $9 a share offer from a consortium led by Toronto insurer Fairfax Financial Holdings Inc, which wants to take the smartphone maker private.

Both Fairfax and BlackBerry declined to comment.

“We do not intend to disclose further developments with the respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives,” a BlackBerry spokesman said.

BlackBerry, which has bled market share to Apple Inc‘s iPhones and devices running Google Inc‘s Android operating system, accepted the tentative $4.7 billion Fairfax offer last month.

The company last week already reported a wide loss and slumping sales and said it will cut 40 percent of its workforce as it seeks to halve its operating expenses.

BlackBerry said when it reported quarterly results that it would update its 2013 outlook in a regulatory filing, and the likely $400 million in charges formed part of the latest regulatory filing, which was released late on Tuesday.

It expects to take those charges over the remainder of this fiscal year, which ends March 1, 2014, and the first quarter of fiscal 2015.

The filing also confirmed that corporate and government customers have been slow to adopt BlackBerry’s new servers, which manage new BlackBerry devices as well as iPhones and Android devices that are used in the workforce.

BlackBerry said it intends to sell $122 million of redundant property, plant and equipment assets as part of its cost-cutting drive. It said its property, plant and equipment had a net book value of $2.2 billion at the end of August, while it valued its intellectual property at $3.35 billion.

(Reporting by Alastair Sharp and Allison Martell; editing by Andrew Hay)

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