Samsung approaches BlackBerry for buyout

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Samsung approaches BlackBerry for buyout

[Update] Offers up to 60 percent premium on trading price.

Samsung Electronics recently approached BlackBerry about buying the company for as much as US$7.5 billion (A$9.2 billion), looking to gain access to its patent portfolio, according to a person familiar with the matter and documents seen by Reuters.

South Korea's Samsung proposed an initial price range of US$13.35 to US$15.49 per share, which represents a premium of 38 percent to 60 percent over BlackBerry's current trading price, the source said.

Executives from the two companies, which are working with advisers, met last week to discuss a potential transaction, the source said, asking not to be identified because the conversations are private.

BlackBerry shares jumped as much as 30 percent on heavy volume in afternoon trading in New York.

The offer price would imply an enterprise value of US$6 billion to US$7.5 billion for BlackBerry, assuming conversion of US$1.25 billion of convertible debt, according to the documents.

BlackBerry announced a high-profile security partnership with Samsung in November. The partnership will wed BlackBerry's security platform with the South Korean company's own security software for its Galaxy devices.

Samsung could not be immediately reached for comment.

Blackberry's patent portfolio is composed of roughly 44,000 patents, worth more than US$1.43 billion in net book value as of August last year, although many analysts think they could be worth much more.

Update: In a statement BlackBerry said it had not engaged in discussions with Samsung regarding "any possible offer to purchase BlackBerry".

"BlackBerry’s policy is not to comment on rumors or speculation, and accordingly it does not intend to comment further."

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