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BlackBerry Ltd (NASDAQ:BBRY) Bursts Buyout Chance on Good Move

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BlackBerry Ltd ,  appears less and less likely to be bought out. CEO John Chen has said on more than one occasion that he recons Blackberry is better off on its own, at least until it grows stronger. Wells Fargo reckons that the latest major move from Waterloo is  signal of that intention.

 

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Over the weekend BlackBerry announced that it planned to spend more than $400M in order to acquire Good Technologies. The deal, in the view of Maynard Ulm at Wells Fargo, is a decent one. It does, however, appear to confirm a lack of interest in being acquired at BlackBerry, and an intent to create its own path.

BlackBerry doubles down on the future

The Good buyout is massive for BlackBerry ,  and it shows the firm’s focus on software. Wells Fargo is very hopeful about what the firm can bring to BlackBerry.

Mr. Ulm wrote that it “gives it a stronger foothold on iOS and Android devices, adds to its Internet of Things platform, and we expect will provide synergies from an infrastructure and technology perspective.”

The report says that a “potential sale of the company less likely in the near term, we believe BlackBerry will likely look at other strategic alternatives — further restructuring, potential divestitures, aggressively target multi-platform strategy.”

Ulm and his crew weren’t exact on their target for shares in BlackBerry. The new report put a price target of between $8 and $9 on shares in the Canadian handset maker.

BlackBerry avoids a buyout

Firms going through major mergers have a harder time getting bought out because it adds a complex extra to the deal. If, say, Apple were to try to splurge on BlackBerry Ltd in the morning, the firm would have to go over the firm’s accounts in order to see what price it’s worth.

After the weekend move, the firm would also have to go over the accounts of Good Tech to make sure there’s no surprises contained within. With a small firm that might be okay, but Good is big enough to do damage to BlackBerry if its house isn’t in order.

That makes any buyout of BlackBerry unlikely, at least until Good’s accounts have been brought under the full control of John Chen. If the firm’s board was looking to sell itself any time soon, it’s not likely it would have okayed the deal to acquire Good.

BlackBerry ,  is in a hard place. The firm is getting stronger, and it has a huge potential market. It also has precarious finances and huge competition in a market that isn’t well defined.

For the time being the firm seems destined to go it alone. The firm is putting hurdles in front of suitors, and even the rumor mill, which once spun on BlackBerry alone, quietens when Mr. Chen’s name is spoken.

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