BlackBerry agrees $4.7bn sale with investor
Troubled smartphone makers signs letter of intent with Fairfax Financial for cash deal
The BlackBerry querty keyboard, logo and icons are seen on the screen of a BlackBerry Curve smartphone. BlackBerry said it reached a tentative agreement for a $4.7 billion buyout by a group led by Fairfax Financial Holdings, its biggest shareholder. Photograph: Simon Dawson/Bloomberg
Troubled smartphone maker BlackBerry has agreed a deal that will see it sold to a consortium led by its largest shareholder for $4.7 billion.
The Canadian firm, which has its European headquarters in the UK, said it had signed a letter of intent agreement with Fairfax Financial over a $9 per share cash deal.
It comes days after BlackBerry, one of the pioneers of the smartphone industry, revealed it expected to make a loss of $1 billion after disastrous sales of its new handsets, and would lay off 4,500 staff.
Canadian billionaire investor Prem Watsa, Fairfax’s chairman and chief executive, said: “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees.
“We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”
Sales of shares in the Nasdaq-listed company, which plunged after Friday’s announcement, were halted after the news of the deal which would take it private.
BlackBerry, which started in 1999, is known for the loyalty of its users, who include Barack Obama.
It carried out a high profile launch of two new handsets at the start of the year, the much delayed Z10 touchscreen and Q10 with a qwerty keyboard, which went on sale later in the year.
A new phone, the touchscreen Z30, was unveiled last week.
But the new handsets failed to win over critics and sales were far below what the firm was hoping for.
Its market share in the first quarter of this year was 2.9 per cent, according to analysts, compared to 41 per cent in 2007.
BlackBerry said it had set up a special committee in August to look at the financial alternatives for the company in the face of its poor trading figures.
The agreement with Fairfax allows it to “go shop” for alternative offers for the firm should they become available during the due diligence process, which is expected to take until November 4th.
Chairwoman Barbara Stymiest said: “The special committee is seeking the best available outcome for the Company’s constituents, including for shareholders. Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.” (PA)