Canadian smartphone maker BlackBerry, struggling to compete in a difficult market, has set up a committee to look at options, including joint ventures, partnerships or a sale of the company.
In a statement released before the market opened on Monday, the company said board member Timothy Dattels, an investment banker and former Goldman Sachs executive, will chair the new committee, which will also include Blackberry Chief Executive Thorsten Heins. “Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” Dattels said in a statement.
BlackBerry pioneered on-your-hip email with its first smart phones and email pagers. But it has struggled to compete against the likes of Apple Inc and phones using Google Inc’s Android operating system, and its new BlackBerry 10 smartphones have failed to gain traction. Reuters last week quoted sources familiar with the situation as saying BlackBerry was considering going private to give it some breathing room as it works through its turnaround.
BlackBerry shares rose 9.4 percent in premarket trading. “While a change in structure could result in a higher stock price in the near term, we do not envision any changes that would help BlackBerry reverse the significant smartphone share loss or rapid decline in service revenues,” said Tim Long, an analyst at BMO Capital markets.
Heins said he was pleased with the progress that has been made and still sees compelling long-term opportunities for the BlackBerry 10. He said the company will continue a cost-cutting drive that has already shrunk the company considerably. Dattels is a senior partner at private equity firm TPG Capital and a former top investment banker at Goldman Sachs. His appointment to BlackBerry’s board last year sparked a flurry of speculation that the company might consider a leveraged buyout or going private. Dattels’ nomination to the board came in June 2012, shortly after BlackBerry hired JPMorgan and RBC Capital Markets to help it evaluate strategies, including a possible overhaul of its business model, as well as other moves like expanding the BlackBerry platform through partnerships and licensing deals.
