BlackBerry (BBRY) Takeout Price Capped at $12-$13; Don't Buy - Nomura

August 14, 2013 7:50 AM EDT
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Nomura Securities analyst Stuart Jeffrey weighed on on a potential takeout of BlackBerry (NASDAQ: BBRY), saying a deal would be capped at $12-$13 per share.

"A quick analysis of what an optimistic buyer might pay for BlackBerry leads us to conclude that a bid of more than $12-13 seems unlikely," according to Jeffrey. "While this offers some upside to the current share price, we do not recommend investors buy the stock into M&A hopes as significant risks and uncertainties remain."

He added, "It seems likely that the BlackBerry board is looking at options to take the company private. This view is based on the board releasing a statement that it is open to acquisitions following a recent Reuters report. We do not expect to see a strategic buyer for BlackBerry and so any deal likely rests on financial investors taking control. We believe that an optimist might see a way to transform BlackBerry into a SaaS company by keeping its email / calendar / contacts / and other mobile services, leveraging the company's relationships with mobile operators and enterprises, and selling or closing the devices unit. The only way that this might succeed, in our view, is if BlackBerry services can be delivered on iOS and Android devices. BlackBerry does not disclose its enterprise subscriber base or revenue run rate. However, we estimate that the company generated about $2.5bn in revenue in FY13 and see this falling to $2.0bn in FY14."

For an analyst ratings summary and ratings history on BlackBerry click here. For more ratings news on BlackBerry click here.

Shares of BlackBerry closed at $10.93 yesterday.

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