TORONTO – BlackBerry is preparing to lobby the Canadian government over foreign-takeover issues amid investor concern that a domestic buyout of the struggling smartphone maker won’t happen.
The company has registered to meet with lawmakers to discuss the Investment Canada Act, which sets rules for foreign acquisitions of local companies, according to federal lobbying documents. The government automatically reviews any takeover bid of more than $332 million.
The push comes amid speculation that Toronto’s Fairfax Financial Holdings, BlackBerry’s largest shareholder, faces long odds in putting together a homegrown bid for the company. While the investment firm is talking to Canadian pension fund managers to build support for a deal, it hasn’t yet had success, according to a person with knowledge of the discussions. Credit-default swap trading suggests that investors are increasingly doubtful that Fairfax will prevail with the effort.
Why would Canadian pension plans buy this thing? said John O’Connell, chief executive officer with investment firm Davis Rea in Toronto, which doesn’t own a stake in BlackBerry or Fairfax. There’s no indication that this business has bottomed, and every indication to show they continue to lose market share.
After years of losing ground to Apple and Google’s Android, BlackBerry announced plans last month to form a special board committee to explore a sale of the company. Giving more leeway to a foreign buyer could make it easier for an acquirer like Lenovo or Microsoft to step in and do a deal.
BlackBerry executives made the disclosure about discussing the Investment Canada Act with lawmakers and government officials in the past week, according to the lobbying register. Before that, the act hasn’t been listed as a subject of interest to the company for years.
Adam Emery, a spokesman for Waterloo, Ontario-based BlackBerry, declined to comment, as did Fairfax President Paul Rivett and Microsoft spokesman Peter Wootton. Doug Augustine, a spokesman for Beijing-based Lenovo, didn’t immediately respond to a request for comment.
Lenovo, the world’s largest personal-computer maker, said in January that it was assessing potential acquisition targets, including BlackBerry. At the time, Canadian Finance Minister Jim Flaherty said certain local technologies were off-limits to foreign buyers. The government would look carefully at a bid from Lenovo, he said. BlackBerry operates secure servers for the Canadian and U.S. governments, which would put additional scrutiny on a Chinese deal.