Chinese personal computer maker Lenovo has reportedly signed a non-disclosure deal to examine the books of troubled Canadian smartphone maker BlackBerry.
Lenovo is looking at a bid for all of BlackBerry, according to the Wall Street Journal, which would include both a faltering hardware business, security-focused service businesses and a string of hard-to value patents.
Smartphone pioneer BlackBerry said in August it was exploring options that could include an outright sale.
An offer from a Chinese company could upset the Canadian government, which vets foreign takeovers to ensure they are in the national interest and do not threaten national security. Industry Minister James Moore declined comment.
BlackBerry shares were little changed on the report, which makes Lenovo as the latest of several companies taking a close look at the books.
BlackBerry virtually invented mobile email with its first email pagers, but it has lost market share to rivals. Its latest results highlighted disappointing sales for a new line of devices the company initially saw as its way to win back a competitive position.
BlackBerry received a tentative US$9 a share offer last month from a consortium led by its largest investor, Prem Watsa's Fairfax Financial Holdings, which wants to buy BlackBerry for US$4.7 billion and take it private. Earlier this month, co-founders Mike Lazaridis and Douglas Fregin said they were also considering a bid.
Others are also looking at the company's books to decide whether to make an offer, industry sources said.
BlackBerry shares have traded well below the US$9 Fairfax offer price on doubts that a deal will go ahead. They rose around 0.2 percent to close at C$8.44 on the Toronto Stock Exchange on Thursday.
The company had US$2.6 billion in cash and equivalents in September, down from US$3.1 billion three months earlier.
Senior Lenovo executives have on more than one occasion expressed an interest in acquiring BlackBerry, or parts of the company, as it would help boost the Chinese company's own smartphone business.
In an interview at the World Economic Forum earlier this year, Lenovo CFO Wong Wai Ming told Bloomberg the company would consider a bid for BlackBerry.
Lenovo downplayed the comments at the time, saying that Wong was speaking broadly about Lenovo's M&A strategy.
A spokesman for Lenovo declined to comment on the latest report.
BlackBerry said its special committee is conducting a "robust and thorough review" of alternatives and it does not intend to disclose further developments until it approves a transaction, or otherwise concludes the review.