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BlackBerry offers itself up to six would-be buyers; Cisco looks like the best fit

The company has also asked SAP, Google, Intel, Samsung, and LG whether they're interested

October 7, 2013 12:28 PM ET

Computerworld - BlackBerry has reportedly asked Cisco, Google, SAP, Intel, LG and Samsung separately to consider buying all or parts of its embattled company.

According to a Reuters report citing unnamed sources, BlackBerry has asked each of the six companies for preliminary expressions of interest by early this week.

Potential buyers would be most interested in BlackBerry's patents and its secure network -- not its smartphone business, the sources said.

If BlackBerry finds any takers from among the six companies, it would come in addition to the preliminary deal the company already has with Fairfax Financial Holdings. Fairfax wants to take BlackBerry private for $4.7 billion.

The secure BlackBerry network includes a Canadian network operations center and relationships with 500 carriers globally that connect to BlackBerry Enterprise Service (BES) servers in larger businesses to deliver email and other data.

Various analysts have valued the network at up to $4.5 billion, with BlackBerry patents worth up to $3 billion. BlackBerry has more than $3 billion in cash and investments, as well, but the smartphone business could cost as much as $2 billion for a potential buyer to dissolve, analysts have said.

While none of the mentioned companies is an especially good fit for parts of BlackBerry, Cisco is "probably the best," said Gartner analyst Ken Dulaney in an email on Monday.

Jack Gold, an analyst at J. Gold Associates, argued that none of the six companies would want to acquire and run BlackBerry in its entirety.

"The Fairfax deal could still be best way forward for BlackBerry," Gold said. "Fairfax could run them for a while and significantly increase the value of the overall company rather than the fire sale going on right now."

Gold said all of the companies except Intel might want BlackBerry Messenger (BBM), which has 60 million monthly users and is one of the few recent successes at BlackBerry. "I see no benefit at all to Intel buying BlackBerry," he said.

The BlackBerry network operations center could be of use to Cisco as a cloud-based Public Key Infrastructure system that could function across multiple carriers, Dulaney said. The BlackBerry network "would help [Cisco] glue together various endpoint devices across multiple networks," he said.

Cisco, however, likes to work through various networking business partners and those partners might see working with BlackBerry as too competitive, he said. "The rest of BlackBerry Cisco wouldn't want," he added. "They would never do devices."

Gold seconded Dulaney's view that Cisco wouldn't want any part of devices, after "very short-lived failures" with a PlayBook tablet and a handheld video camera called the Flip.

Gold added that Cisco could add the BlackBerry network its own social network through Webex to make Webex more secure for large business users.



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