BlackBerry v. Co-founders Buyout
BlackBerry v. Co-Founders
After announcing open for purchase, BlackBerry has already agreed to a non-binding offer from Fairfax. Before the deadline (Nov.4) of Fairfax’s offer, BlackBerry can still accept higher offer from others, thus co-founders of BlackBerry, who own 8% shares of BlackBerry, are running a bid.
Negotiation Environment
Number of Parties: Two Parties. One is the rest 92% of BlackBerry’s shareholders (represented by the CEO and the board of BlackBerry). The other is a potential buyer, the second largest shareholder of BlackBerry, also known as the co-founders of BlackBerry, Mike Lazaridis and Douglas Fregin.
Number of Issues: Four. First is whether to transact a portion, several portions or the whole company. Second is the price of the transaction. Third is when the payment will be. Fourth is whether new owners should manage the company after takeover.
Nature of Relationship: The co-founders already own many shares of BlackBerry and technically are “bosses” of the CEO and the board. If the deal is made, there is going to be an even more close relationship between the two parties.
Alternatives for BlackBerry: First, outright sale to Fairfax, although BlackBerry could easily be stood up because Fairfax’s conditional offer provides that it can get out of the transaction without paying a penalty. Second, split the company into pieces and sell each to different buyers. Third, wait for another outright buyer, though waiting could further reduce the share price of BlackBerry. Fourth, other strategic plans, such as joint venture, that developed by its special committee.
Alternatives for Co-founders: Make other acquirements for companies with segments that they want. Or they can build a business with segments they want on their own as they did with BlackBerry.
Are contracts binding? The final transaction contracts are binding, though agreements throughout the negotiation could be conditional and thus not binding.
Costs and Benefit to Delay: A delay
After announcing open for purchase, BlackBerry has already agreed to a non-binding offer from Fairfax. Before the deadline (Nov.4) of Fairfax’s offer, BlackBerry can still accept higher offer from others, thus co-founders of BlackBerry, who own 8% shares of BlackBerry, are running a bid.
Negotiation Environment
Number of Parties: Two Parties. One is the rest 92% of BlackBerry’s shareholders (represented by the CEO and the board of BlackBerry). The other is a potential buyer, the second largest shareholder of BlackBerry, also known as the co-founders of BlackBerry, Mike Lazaridis and Douglas Fregin.
Number of Issues: Four. First is whether to transact a portion, several portions or the whole company. Second is the price of the transaction. Third is when the payment will be. Fourth is whether new owners should manage the company after takeover.
Nature of Relationship: The co-founders already own many shares of BlackBerry and technically are “bosses” of the CEO and the board. If the deal is made, there is going to be an even more close relationship between the two parties.
Alternatives for BlackBerry: First, outright sale to Fairfax, although BlackBerry could easily be stood up because Fairfax’s conditional offer provides that it can get out of the transaction without paying a penalty. Second, split the company into pieces and sell each to different buyers. Third, wait for another outright buyer, though waiting could further reduce the share price of BlackBerry. Fourth, other strategic plans, such as joint venture, that developed by its special committee.
Alternatives for Co-founders: Make other acquirements for companies with segments that they want. Or they can build a business with segments they want on their own as they did with BlackBerry.
Are contracts binding? The final transaction contracts are binding, though agreements throughout the negotiation could be conditional and thus not binding.
Costs and Benefit to Delay: A delay