Oh dear! Blackberry top guns could not pull the
company out of the woods. They are selling it to a shareholder. Fairfax
Financial Holdings, which has the largest share in the company has made an offer and is seeking to take it private in
a deal that values the smartphone manufacturer at just US$4.7 billion -- a far
cry from its peak in 2009 when the company was worth US$84 billion. How art the
mighty fallen!
BlackBerry confirmed the deal. The directors of the company are recommending the
offer.
The consortium is offering US$9 per share to buy
the company - a premium on the share price earlier today, but below the average
of US$10.60 per share the company was trading at before it announced last
week's billion dollar loss and 4,500 redundancies.
At the end of the second quarter, Blackberry had
around US$2.6 billion in cash and equivalents in the bank -- so the net cost to
the buyers of the company comes in at just US$2.1 billion.
Fairfax, which owns approximately 10 percent of
BlackBerry's shares, intends to contribute its stake into the transaction.
Prem Watsa, Chairman and CEO of Fairfax, 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."
The due diligence on the company is expected to
be completed in early November, and the company is free to seek out competing
offers from other buyers. Considering the patent pool owned by the company, and
its large BBM consumer base, other handset and service providers may be keen to
launch a hostile counter bid.
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