BlackBerry Ltd. and Samsung Electronics Co. denied reports that they are in talks about Samsung potentially acquiring the Canadian smartphone maker.
BlackBerry retreated after an earlier surge, falling as much as 17 percent to $10.50 in late trading in New York. Reuters, citing an unnamed person and documents, reported that Samsung had recently approached BlackBerry with an initial offer price of $13.35 to $15.49 a share, valuing the company at as much as $7.5 billion. Reuters also said executives from the two companies met last week to discuss a transaction.
The report is “groundless,” Samsung said in an e-mail.
BlackBerry said it’s “aware of certain press reports published today with respect to a possible offer by Samsung to purchase BlackBerry,” according to a statement. “BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry.”
The statement from Waterloo, Ontario-based BlackBerry didn’t specify whether it had received a proposal from South Korea-based Samsung.
BlackBerry gets offers all the time, according to a person close to the company, who asked not to be identified discussing private information. Investors would want a much higher takeover price than what Reuters reported, the person said.
The reported purchase price would be at least a 37 percent premium to BlackBerry’s closing price on Tuesday. BlackBerry rose 30 percent to $12.60 at the close in New York Wednesday, the biggest gain in more than a decade.
Just two months ago, BlackBerry announced it was teaming up with Samsung, one of its biggest rivals in the growing mobile device management market, for a management-services partnership. It marked the first time the competitors have worked together on a major product.
That partnership was one piece of Chief Executive Officer John Chen’s efforts to focus BlackBerry on business users and security as he aims to reach sustainable profit and revenue growth in the fiscal year that ends in 2016. He already reached a milestone of generating cash again in the most recently reported quarter.
Samsung has “shown some interest in partnering with BlackBerry recently,” said Desmond Lau, an analyst at Toronto-based Veritas Investment Research Corp. Plus, “it’s much less risky to buy a company that is not burning cash than having to take over a company purely for its assets and technology and then find a way to not lose money.”
BlackBerry shares rose 48 percent in 2014 as Chen’s turnaround strategy started to take hold. They are still well below the company’s heyday when the stock closed above $147 in 2008 before BlackBerry’s share of the smartphone market dwindled.
Samsung’s Knox system, which offers a suite of secure work applications, can now run on BlackBerry’s new server, known as BES12. The partnership competes with an alliance of International Business Machines Corp. and Apple Inc.
One question is whether the Canadian government would approve the sale of BlackBerry to a foreign company. Canada reviews foreign takeovers valued at more than C$354 million ($296 million) to determine if the deal represents a “net benefit” to the country. The government can also review deals based on national security considerations.
Jake Enwright, a spokesman for Canadian Industry Minister James Moore in Ottawa, said he can’t comment on “speculation and rumors.”
Canadian Finance Minister Joe Oliver declined to comment on whether the government had received advance notice of an offer for BlackBerry or whether it would allow a South Korean company to acquire BlackBerry.
“I can’t comment on that specific situation,” Oliver said Wednesday at a press conference in Vancouver. “Whatever decisions that would be made under Investment Canada would be reviewed by Minister Moore and the Cabinet.”
Chen took over in late 2013 after a plan collapsed to take the smartphone maker private. Since then, Chen has focused on providing software and security for governments and corporations, while also introducing new phones that cater to business users, like the Passport and the Classic.