BlackBerry may be on its last legs, but the company still has multiple suitors.
A consortium that includes the wireless company Qualcomm, the private equity firm Cerberus Capital Management and BlackBerry’s co-founders, Mike Lazaridis and Doug Fregin, is preparing a bid for the company ahead of a Monday deadline, according to people briefed on the process.
Details of the group’s bid, which was first reported by the Wall Street Journal, were not clear. And the people briefed on the process said it could still fall apart.
But the consortium had the makings of a serious bid that could set it apart in what has become a messy auction process.
BlackBerry, once the leader in smartphones, has been overtaken by Apple with its iPhone, and a raft of devices using Google’s Android operating system. The depths of BlackBerry’s troubles became clear in recent weeks, as the company reported a quarterly loss of nearly $1 billion and a steep decline in revenues.
In Qualcomm, the group has wireless experience and a large corporate entity that could backstop BlackBerry’s losses. Cerberus brings cash to the table. And Mr. Lazaridis and Mr. Fregin own about 8 percent of the company’s equity, easing the group’s path to control.
Should the group submit a bid ahead of Monday evening’s deadline, its only competition at this point would be a highly conditional $9 a share bid from Fairfax Financial Holdings, a Canadian insurance and investment company. That bid would value BlackBerry, which is hemorrhaging cash, stuck with unsold inventory and apparently directionless, at $4.7 billion.
The offer from Fairfax, which already owns about 10 percent of BlackBerry, was made last month as the company’s stock price was in a free fall. That bid was orchestrated by V. Prem Watsa, chief executive of Fairfax. But it was unclear on Friday if Fairfax would be able to arrange financing for its proposed bid.
BlackBerry stock closed on Friday at $7.77 per share, but was up slightly in after-hours trading.
Other groups, including the computer maker Lenovo, of China, have reportedly considered making bids for BlackBerry. But so far, few potential buyers appear to have the appetite to take over the slumping Canadian handset maker.
If the Qualcomm consortium does make an offer over the weekend, BlackBerry may announce its receipt of a proposal on Monday morning. At that point, the company could potentially extend the deadline for final bids, or announce its choice of a bid as late as Tuesday morning.
If BlackBerry accepts an offer other than the Fairfax proposal, it will owe Fairfax about $157 million. It is highly unusual to see a break fee included in such conditional agreements, but it appeared that BlackBerry was willing to accept such terms in the hastily arranged deal to arrest its stock price decline.
Any ownership group including Mr. Lazaridis would be unlikely to pull BlackBerry out of the business of making phones to concentrate on software and providing high security, wireless network services.
In their final months as co-chairmen and co-chief executives, Mr. Lazaridis disagreed with Jim Balsillie about BlackBerry’s direction. Mr. Lazaridis firmly believed that BlackBerry’s future rested with the BlackBerry 10 line of phones, which were introduced earlier his year. Mr. Balsillie, meanwhile, wanted to shift the company’s focus toward greater emphasis on services based about the BlackBerry Messenger, or BBM, instant messaging service.
The divide between the men continued after they both stepped down from their positions in January 2012 to become just board members. Some people familiar with the board’s deliberations said that the dispute prompted Mr. Balsillie’s decision to quit the board and liquidate all of his BlackBerry shares.
In particular, Mr. Lazaridis objected to the idea of creating BBM apps for iPhones and Android-based handsets. At the peak of its popularity, BBM was a significant sales feature for BlackBerry handsets.
The BlackBerry 10 phones as well as the BlackBerry PlayBook tablet computer, however, proved to be commercial failures and led directly to the company’s decision to effectively put itself up for sale.
Exactly how Mr. Lazaridis can revive BlackBerry’s fortunes in the critical United States smartphone market is not clear.
Mr. Fregin and Mr. Lazaridis met at school in their hometown of Windsor, Ontario. Both were active in the company’s early days, as it bounced from product to product. But after BlackBerry found success with wireless email devices, Mr. Fregin gradually faded from public view.
Mr. Lazaridis developed, and maintains, a prominent public profile in Canada both for his technical work at BlackBerry and his funding of educational institutions. But it is widely recognized that Mr. Balsillie was largely responsible for the company’s early marketing and financial success.
Unlike Apple, which designs its own processors, BlackBerry relies on Qualcomm for the chips that operate its new line of phones.
Although Qualcomm controls a large number of wireless communications patents, presumably it is also interested in some of the patents held by BlackBerry.
Michael J. De La Merced contributed reporting.
