You are here

BlackBerry may be valued as if still smartphone king

Thursday, January 15, 2015 - 08:27

BlackBerryPhone150115.jpg
Samsung Electronics Co. may be valuing BlackBerry Ltd. like it's still the leader in smartphones.

[NEW YORK] Samsung Electronics Co. may be valuing BlackBerry Ltd. like it's still the leader in smartphones.

The South Korean conglomerate approached Waterloo, Ontario- based BlackBerry with an initial takeover offer price of US$13.35 to US$15.49 a share, Reuters reported, citing an unidentified person and documents. At the high end, that would value BlackBerry at about US$7.1 billion after subtracting net cash, or 24 times its trailing 12-month earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. It would be Samsung's largest acquisition.

The last time investors assigned BlackBerry that rich of a valuation, its devices still controlled half the smartphone market and Apple Inc.'s iPhone had yet to outsell them. BlackBerry's market share has since shrunk to about 1 per cent.

"That's a lot of money for a company with about 1 percent market share in the US," Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts, said in a phone interview. "God bless them if they're getting that, but that's a lot of money for a company that's not going anywhere."

sentifi.com

Market voices on:

On a revenue basis, the potential offer is a multiple of 1.9, which BlackBerry shares haven't commanded since early 2011, data compiled by Bloomberg show.

BLOOMBERG

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom