1. Term Sheet Purchase Price Tax Considerations
Total deal size: $xxxxx million Implied price per share: $x.xx Transaction fees: $x.xx Cap: $x.xx
Tax Considerations
Form: Purchase accounting Consideration: 100% cash
Legal Asset purchase Spin-off unused entities
Synergy Value $x.xx billion in revenue enhancements $x.xx billion in transaction costs
Transaction process requirements
Termination penalties: Cash penalty of $100 million plus out of pocket expenses up to $20 million Other: No shop clause Shareholder vote: Blackberry and Samsung shareholders must approve the deal. Closing Date: March 1st, Regulatory: Industry Canada Act approval required
Social Issues
Organization structure: Blackberry assets acquired by Samsung. Blackberry dissolved. Executives: Executives responsible for security and R&D retained Board seats: None Headquarters: Canada HQ closed but R&D functions to remain in Canada Name: Blackberry brand kept for marketing purposes Reduction in workforce: out of 7000 total employees. Retain R&D staff.

2. Deal Rationale
Acquisition of Blackberry assets will provide many benefits to Samsung
Thousands (44,000+) of patents
Enterprise level security for their Android-based platform
Block competitors (Apple and others) from acquired the most admired enterprise security platform

3. Risks
Requires the blessing of Prem Watsa, whose Fairfax Financial Holdings Ltd (FFH.TO) is a major Blackberry shareholder
Government approval under Industy Canada Act make be difficult. Government already spoke out against potential Lenovo (China) acquisition of Blackberry. Only option may be to take a significant stake in the company and operate it independently.
Unable to spin off and capture value of unused acquired assets (hardware division, etc)
Exchange rate risks significant due to this being a cash deal
Ability to maintain key R&D staff amidst significant downsizing.
Ability to shutter international operations (1/2 employees are outside of Canada) without incurring significant unexpected costs due to negotiation with unions, local governments, etc.
Entirely reliant on driving additional Samsung sales in enterprise market. No cost synergies since this is an asset acquisition.

4. Bidding Strategy Bidding should be bound by the following:
Upper bound of $x.xx
Lower bound of $x.xx
Blackberry is widely considered to be on the selling block
Current market share may already contain some acquisition premium
Samsung must bid high enough to win over Blackberry shareholders and avoid a bidding war with other acquirers that may jump in
Recommended initial bid of $x.xx

5. Accretion/Dilution Analysis
Since this is an asset purchase, the acquisition of Blackberry will have no immediate impact on EPS