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BlackBerry future in doubt as buyer struggles to raise cash

The future of BlackBerry could be decided today as the troubled company hurtles towards today's deadline to find a buyer.

The future of BlackBerry could be decided today as the troubled company hurtles towards today's deadline to find a buyer.

Two contenders have emerged as possible saviours of the company. BlackBerry's largest shareholder, Canadian insurance and investment company Fairfax Financial Holdings, proposes to spend $4.7bn to take control of the rest of the company.

And the New York Times reports BlackBerry's co-founders and substantial shareholders Mike Lazaridis and Doug Fregin are backed in a serious bid by chipmaker Qualcomm and private equity firm Cerberus Capital Management.

The deadline for bids is the end of play in the US, later today.

But the Fairfax bid is said to be struggling to secure backing due to BlackBerry's recent financial woes. In its most recent figures, the Canadian company tallied a quarterly loss of nearly $1bn after new BlackBerry 10 failed to fight back against the iPhone and Android rivals.

BlackBerry is keeping schtum for now, telling me a "Special Committee, with the assistance of the Company’s independent financial and legal advisors, is conducting a robust and thorough review of strategic alternatives. 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."

"Loss of confidence" 

Industry expert www.radiofreemobile.com Dr Richard Windsor reckons BlackBerry will struggle to secure a buyer, for two simple reasons: "First, the valuation at which Fairfax agreed to buy BlackBerry looks way too high to anyone except a BlackBerry shareholder. Second, since what must have been the worst profit warning in its history, there has been a systemic loss of confidence in BlackBerry as a going concern.

Other manufacturers are unlikely to step in, either. "There has been interest around BlackBerry Messenger and the patent portfolio but no one seems to want the handset business," says Dr Windsor. "Asian vendors like Lenovo looking to make a splash in the handset market will remember only too well the cataclysm that was BenQ’s take-over of Siemens’ handset business, and will be extremely cautious.

"In Nokia and its own enterprise business Microsoft already has all the assets it needs to steal all of BlackBerry’s existing customers, and so I see no reason why it would encumber itself with an asset that can add no value.

"For anyone unlucky enough to be still holding stock, there is only one rational action before the close of trading today."

Is BlackBerry doomed? What went wrong? Tell me your thoughts in the comments or on our Facebook page.