Canadian government reportedly blocks Lenovo bid for BlackBerry
A published report out of Canada on Tuesday says that Chinese tech company Lenovo was seriously considering making a bid for BlackBerry, but the Canadian government rejected the idea due to national security concerns. The Canadian government had previously been in touch with BlackBerry and told the beleaguered manufacturer that it would not allow a Chinese firm to purchase a company involved in the infrastructure of the country's telecommunication network.
Because the Canadian government had made its position clear, BlackBerry never submitted any proposal to Ottawa that involved a Lenovo purchase of the company. BlackBerry operates a secure network that handles encrypted communications for the government and businesses, and there was concern that the Chinese government would be able to infiltrate the network using Lenovo as a front.
According to those inside the loop, Lenovo wanted very badly to buy BlackBerry and was prepared to pay the billions necessary to make the purchase. But BlackBerry could not afford to wait around for a security review which might have taken weeks if not months to complete, leaving the company essentially in limbo while the government decided the merits of a Lenovo buyout.
On Monday, a $9 a share, $4.7 billion bid for BlackBerry from its largest shareholder, fell apart. Instead, Fairfax Financial will buy $250 million of a $1 billion convertible debt offering that will help BlackBerry stay alive for now. As part of the negotiations involved, Thorsten Heins was removed as CEO and replaced by John Chen. But don't start up a collection for Heins just yet. Under the terms of his contract, he could be due $22 million from BlackBerry because of his departure from the company.
source: TheGlobeandMail via Crackberry
Because the Canadian government had made its position clear, BlackBerry never submitted any proposal to Ottawa that involved a Lenovo purchase of the company. BlackBerry operates a secure network that handles encrypted communications for the government and businesses, and there was concern that the Chinese government would be able to infiltrate the network using Lenovo as a front.
According to those inside the loop, Lenovo wanted very badly to buy BlackBerry and was prepared to pay the billions necessary to make the purchase. But BlackBerry could not afford to wait around for a security review which might have taken weeks if not months to complete, leaving the company essentially in limbo while the government decided the merits of a Lenovo buyout.
"This is a company that has built its reputation and built its success on system security and its infrastructure. That’s one of the reasons businesses use BlackBerries. … The security is robust and we’d obviously have an interest in making sure we didn’t do anything or allow anything that would compromise(it)"-Anonymous Canadian official
On Monday, a $9 a share, $4.7 billion bid for BlackBerry from its largest shareholder, fell apart. Instead, Fairfax Financial will buy $250 million of a $1 billion convertible debt offering that will help BlackBerry stay alive for now. As part of the negotiations involved, Thorsten Heins was removed as CEO and replaced by John Chen. But don't start up a collection for Heins just yet. Under the terms of his contract, he could be due $22 million from BlackBerry because of his departure from the company.
source: TheGlobeandMail via Crackberry
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