BlackBerry has signed a letter of intent that will see a private equity firm led by existing 10% shareholder Fairfax Financial buy out the remainder of shares for $4.7bn (just under £3bn).
The deal will pay other investors $9 per stock – BlackBerry stocks were trading at $8.23 before the deal was announced – and will be officially confirmed after a six-week period of due diligence and regulatory approval.
Other bidders will be able to step in with a better offer during that time, but with Fairfax chairman Prem Watsa having stepped down from the BlackBerry board recently while a special committee looked at “strategic alternatives” for the company going forward, it's clear Fairfax has been eyeing a bid for some time.
The news comes after BlackBerry warned on Friday that it was heading for a near-$1bn operating loss in its latest quarterly figures, and confirmed rumours that 4,500 staff – around 40% of its entire workforce – would be cut in a desperate bid to keep the company afloat.
But that was last week, and this week sees all the relevant parties involved in the Fairfax bid talking once again of a brighter future for the Canadian firm.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Watsa said as the deal was announced.
“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.”
However, BlackBerry itself hinted it would be open to other offers while the Fairfax offer was being assessed. “The special committee is seeking the best available outcome for the company’s constituents, including for shareholders,” said board chair Barbara Stymiest – who heads up the committee.
“Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal.”