China’s Lenovo has thrown its hat into the ring for struggling smartphone maker, BlackBerry, the WSJ reports. But the stockmarket is not very excited.
Shares in BlackBerry gained less than 1% after news of Lenovo’s interest hit the tape, only to retreat to their previous level. They remain well below the $9 per “stalking horse” bid from the company’s major shareholder, Fairfax Financial, which has been accepted by the BlackBerry board.
It might seem like a surprisingly muted market reaction, given that the report says Lenovo has been actively pursuing a bid for the entire company, and signed confidentiality agreements that would give it a more detailed look at the fallen smartphone maker’s books. Thus far, the other strategic players circling BlackBerry, which are believed to include Google, SAP and Cisco, have been linked with a break-up of the company into individual assets.
The Chinese firm has done big cross-border deals before—it bought IBM’s personal computer businesses in 2005 for $1.25 billion. But heightened sensitivities about cyber-security might make Blackberry, which is a major supplier to the US and Canadian governments, a bridge too far. Lenovo equipment has reportedly been banned from intelligence and defense agencies throughout the anglosphere, including in the US and Canada, out of fears that it might be used as a conduit for cyber-attacks. Lenovo’s compatriot company, Huawei, has been beset by similar accusations.
Maybe that’s why the market remains skeptical. Or it could just be the fact that the company itself downplayed its involvement in any deals earlier this week.