Fairfax consortium agrees to buy BlackBerry for US$4.7bn

24 Sep 20131 Share

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Troubled smartphone maker BlackBerry has signed an agreement to enter into a six-week due diligence period with a consortium led by Fairfax Financial Holdings, which aims to acquire BlackBerry for around US$4.7bn.

BlackBerry’s board of directors have signed and approved a letter of intent.

Fairfax already owns around 10pc of BlackBerry’s common shares. Each existing BlackBerry shareholder will receive US$9 per share in cash.

During the six-week due diligence period, BlackBerry has the right to “go shop” for other prospective buyers but would have to pay Fairfax a termination fee.

BlackBerry appointed a special committee in recent weeks to plot the company’s future and it is clear it didn’t beat around the bush.

Barbara Stymiest, chair of BlackBerry’s board of directors, 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.”

Last week, BlackBerry reported operating losses of US$960m and announced a plan to reduce its workforce by 40pc – some 4,500 workers. The company also announced a plan to refine its smartphone range down to four models and a plan to make the Z10 available to a broader and younger audience.

“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” said Prem Watsa, chairman and CEO of Fairfax.

“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.”

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com