Potential Buyers Wait For BlackBerry's Patents

Potential buyers are waiting on the sidelines to see if BlackBerry will part with its patents, according to two sector bankers.
One banker speculated that if by 2015, Blackberry’s turnaround proves slow, and the company’s in need of capital, it could sell patents to bolster cash reserves. A price of $2 billion may appeal to both buyer and seller, the banker postulated.
“BlackBerry has no plans at this time to sell its entire patent portfolio,” said  Lisette Kwong, a spokesperson for BlackBerry. “We have invested years of research and development and millions of dollars to create the world’s best mobile keyboard, messaging platform and enterprise technologies. We are proud of our patented designs and technology and will continue to innovate and deliver intellectual property for solutions that drive the mobile communications market forward.”
In August, 2013, BlackBerry announced that it formed a special committee to explore strategic alternatives, including a sale of the company. BlackBerry’s patent portfolio was the butt of much speculation, worth somewhere between $5 billion and $200 million in published estimates, depending on price of similar intellectual property, buyer interest, license growth and the potential for patent infringement suits.
Fairfax Financial Holdings, which owns 10% of BlackBerry, made a $4.7 billion offer for the troubled smartphone maker in September 2013, but instead of acquiring BlackBerry, it chose to purchase $1 billion in convertible debt in November and an additional $250 million last month.
The financing alleviated an immediate need for capital, the first banker said, but by next year, BlackBerry and buyers may come to a meeting of minds about whether to sell the asset and for what price.
On November 4, BlackBerry announced it appointed a new CEO, John Chen, formerly the CEO of Sybase, to “stop the bleeding” at the company, noted the second banker. If Chen’s successful, the company has no need to sell patents, though right now, the buyers and the smartphone maker are “waiting” to see how the scenario evolves.
“By all appearances, BlackBerry’s doing what it needs to grow,” said a third banker, “though if the ship’s burning, it will do everything it can to save itself.”
A fourth banker doubted BlackBerry would sell patents separately from the whole company unless it received a lucrative offer or its back was against the wall. Fairfax’s purchase of debt was tied to the value of patents as a “floor” in the event of “a worst case scenario” for the company, he said. www.forbes.com