BlackBerry has found a buyer for its much diminished business. The foundering smartphone pioneer said Monday that it had agreed to be acquired by a consortium led by Fairfax Financial Holdings, which will take it private in a deal worth about $4.7 billion.
Under the terms of the deal, the consortium — whose other members were not disclosed — will pay $9 per share for all outstanding shares of BlackBerry not held by Fairfax, which currently owns a 10 percent stake in the company.
Due diligence on the deal is expected to be completed by Nov. 4, while the consortium arranges financing from BofA Merrill Lynch and BMO Capital Markets. BlackBerry’s board has approved the deal and the company has signed a letter of intent.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Fairfax Chairman and CEO Prem Watsa said in a statement. “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.”
News of the consortium’s bid for BlackBerry comes on the heels of the company’s pre-announcement of a gruesome shortfall in second-fiscal-quarter earnings and plans to sack 4,500 employees as part of a massive restructuring intended to reduce expenditures by 50 percent by 2015.
At $8.99, BlackBerry shares are trading up three percent on the news.
Hard to fathom that BlackBerry was once an $83 billion company. But back in 2008 it was.
Here’s the announcement in full:
BlackBerry Enters into Letter of Intent with Consortium led by Fairfax Financial
Waterloo, ON – BlackBerry Limited (NASDAQ:BBRY; TSX:BB) today announced it has signed a letter of intent agreement (“LOI”) under which a consortium to be led by Fairfax Financial Holdings Limited (“Fairfax”) has offered to acquire the company subject to due diligence.
The letter of intent contemplates a transaction in which BlackBerry shareholders would receive U.S. $9 in cash for each share of BlackBerry share they hold, in a transaction valued at approximately U.S. $4.7 billion. The consortium would acquire for cash all of the outstanding shares of BlackBerry not held by Fairfax.
Fairfax, which owns approximately 10 percent of BlackBerry’s common shares, intends to contribute the shares of BlackBerry it currently holds into the transaction.
The BlackBerry Board of Directors, acting on the recommendation of a special committee of the board of directors (the “Special Committee”), approved the... Read the rest of this post --->
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