BlackBerry share price down, denies negotiation talks with Samsung

BlackBerry Ltd and Samsung Electronics have both denied rumors that the South Korean technology giant has made an acquisition offer to the Canadian company.

“BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry,” the company said in statement, outlining that it does not intent to further comment on speculations.

Citing an unnamed person with knowledge of the situation and documents viewed by Reuters, the media reported that Samsung has made an initial offer of $13.35 to $15.49 per BlackBerry share, putting the overall value of the company at more than $7.5 billion.

Reuters backed up the theory by saying that executives, accompanied with advisers, participated in a meeting last week to negotiate over a possible agreement.

BlackBerrys shares jumped almost 30% on Wednesday, its biggest increase in more than ten years, after the news were released. However, the stock cut in half its gain on Thursday in pre-market trading as the companies denied the possibility of an acquisition.

“Media reports of the acquisition are groundless,” Samsung said in a statement.

According to Canadas Globe and Mail, BlackBerry has already rejected several takeover offers valued at significantly more than $7 billion during recent months. The newspaper said that BlackBerrys board of directors maintain their support of CEO John Chens turnaround plan, which is expected to deliver greater returns compared to the takeover offers.

In line with its multi-year strategy Mr. Chen is planning to release new devices and services targeted at corporate and government consumers, while also focusing on mobile security. The plan was created to deliver sustainable profit and sales growth during the 2015/2016 financial year. Providing evidence of a well built and executed plan, BlackBerrys share rose 48% in 2014, when the strategy was implemented.

Another part of Mr. Chens turnaround plan was the partnership with Samsung, announced two months ago. The companies plan to work together to improve the security of Samsungs Knox business solution, marking the first time the rivals have combined efforts to develop a major product. The partnership is also aimed at competing with a co-operation of Apple and IBM.

However, even if Samsung and BlackBerry reach an agreement, the Canadian government can still overrule the deal. Official go over international takeovers with a valuation of more than $296 million and decides whether the agreement would result in a “net benefit” for the country.

BlackBerry jumped 29.48% on Wednesday to CAD 15.02 in Toronto, marking a one-year increase of 65.05% and valuing the company at CAD 7.94 billion. On Thursday the stock fell 16.55% to $10.51 at 10:28 GMT in pre-market trading.