BlackBerry shares jumped 8 per cent in trading Monday after an unconfirmed report indicated Chinese computer giant Lenovo may make a bid for the smartphone maker.
Citing a “source familiar with the matter,” Benzinga.com reported Saturday that Lenovo could make a bid for BlackBerry as early as this week.
Lenovo would initially offer $15 a share for the Waterloo, Ont.-based company, but would be willing to go up to $18 per share, the source reportedly told Benzinga.
BlackBerry shares were trading at around $10.20 U.S. on Monday afternoon, having closed at $9.49 U.S. on Friday.
BlackBerry would not speak to media about the report, saying it doesn’t comment on rumours or speculation.
Any potential Lenovo bid for BlackBerry could face both political and regulatory hurdles. There was talk last year of a Lenovo bid for BlackBerry, but according to news reports, the Harper government told Lenovo it would not accept a Chinese company buying such a large Canadian tech company, for national security reasons.
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Prime Minister Stephen Harper had previously argued the struggling smartphone maker — which has seen its market share evaporate since the rise of the iPhone and Android phones — should grow “as a Canadian company.”
Analysts appeared largely skeptical a deal could happen.
“The greatest concern by far is regulatory approval, particularly with Blackberry’s push into high-security, government and enterprise sales, both in hardware and software,” equity analyst Brian Colello said, as quoted at the Financial Post.
“That’s the hurdle that has made it extremely difficult for BlackBerry to sell itself previously. We see no indication that those regulatory hurdles are less today than they were a year ago.”
BlackBerry’s latest move to jump-start its sputtering business came in the form of the Passport, a new smartphone launched last month and aimed at the business crowd that once almost unanimously favoured BlackBerry devices.
But it’s the company’s secure, encrypted communications features that are likely to raise the most concerns among regulators. BlackBerry has been expanding its role in secure communications, recently buying SecuSmart, a German anti-eavesdropping company.
The move coincided with a ringing endorsement of BlackBerry security features from the German government. A buyout of BlackBerry by a Chinese company would like raise security concerns in Germany and elsewhere. (Though Germany has lately been preoccupied with U.S. spying.)
BlackBerry lost $209 million in the latest fiscal quarter, beating analysts’ subdued expectations. However, sales fell short of expectations, at $916 million, compared to $1.57 billion a year earlier.
Lenovo, best known for its ThinkPad line of latptops, which it bought from IBM a decade ago, has been on a spending spree lately, picking up Motorola's smartphone business from Google earlier this year for $2.9 billion U.S.