The full-page advertisement on page A5 of the Oct. 15 issue of The Washington Post tells an important story about BlackBerry and its desire to remain intact as a company. There’s been a great deal of speculation about the probable outcome of the company’s announcement that it would entertain strategic offers. One such offer has come from Fairfax Financial Holdings in a $4.7 billion deal that would take BlackBerry private.
Unfortunately for BlackBerry, the word is also out that companies including Google and Cisco may be considering offers for part of the company, effectively breaking the company up. As a result BlackBerry would cease to exist as a phone maker and core of a mobile technology ecosystem. Once that got out, BlackBerry’s partners and customers started a process known as “freaking out.” Clearly, damage control was in order.
That damage control took the form of social media announcements as well as an open letter to anyone who might care about BlackBerry. In its corporate blog, the company said that its customers and partners could count on BlackBerry to be there for them in the future and made a commitment to stay in business to serve its customers.
“Our customers are the heart of our success and we are laser-focused on continuing to serve them,” the company said in its blog. “BlackBerry is for people who value productivity as their top priority during the day. Our fans are proud power users who are always on the go and striving to achieve. They work hard. They play hard. They make decisions. They get things done. They change business, markets and the world they live in. BlackBerry will not waiver from our commitment to them.”
No question that this is a strong sentiment and an indication that the company could intend to reject offers to break it up and sell its components piecemeal. The Special Committee that is examining offers certainly has the ability to move forward with Fairfax as planned, but the next question may be whether it can do so in reality.
The problem with letters of intent, which is what BlackBerry and Fairfax Financial Holdings have jointly signed, is that they are not promises set in stone. They’re conditional. On the one hand, Fairfax Holdings first has to complete its due diligence, which it plans to do early in November. Only when that step is accomplished can the two sides decide whether it’s financially feasible to make a deal.
On the other hand, the Special Committee is required to consider other offers it may receive for purchase of the company.