The price of BlackBerry Ltd. shares rose by just over one per cent today following reports that another bidder has surfaced to propose an alternative deal to the $4.7 billion tentative offer by Toronto-based insurer Fairfax Financial Holdings Inc.
BlackBerry has attracted the interest of Cerberus Capital Management LP, a private equity firm based in New York., according to a report in the financial publication Wall Street Journal.
Cerberus intends to sign a confidential agreement which would enable it to access BlackBerry’s private financial information, sources privy to the matter told the WSJ.
As news of Cerberus’ plans spread today, BlackBerry (TSE: BB) shares went up to about $8 in the early afternoon. This reversed a five per cent fall from an earlier session but still left the shares a dollar below the $9 per share the consortium led by Fairfax (TSE: FFH.U) has offered for the troubled smart phone maker.
BlackBerry has declined to comment on the reports of a rival bidder. A spokesperson for the company said the BlackBerry will not disclose information “until we approve a specific transaction or otherwise conclude the review of strategic alternatives.”
While the reports contain little in the way of specifics, the additional offer for BlackBerry “makes an already dynamic situation even more so,” said Carmi Levy, a Toronto-based independent technology analyst.
“Cerberus has traditionally targeted distressed companies and tends to lean towards the break-up-and sell-the parts end of the spectrum,” said Levy.
However, it’s too early in the process to speculate on what this could mean to BlackBerry, Fairfax or other stakeholders, he said.
Cerberus is not among the companies that BlackBerry has courted in recent months when it sought a buyer. The company has kept a low profile for years but it is recognized for its earlier acquisition of Chrysler Group LLC.
Earlier this year, Cerberus signed a deal for the $3.3 billion purchase of grocery chain Supervalu Inc. (NYSE:SVU)