BlackBerry gets $4.7b buyout offer

Dylan Bushell-Embling
24 Sep 2013
Daily News

Beleaguered smartphone maker BlackBerry has provisionally agreed to a $4.7 billion deal to take the company private.

A consortium led by BlackBerry shareholder Fairfax Financial Holdings has offered $9 per share to buy out the remaining shares in the company and delist it.

BlackBerry said it has signed a letter of intent for the buyout offer after its board approved the terms.

The company will have until November 4 to pursue another offer, and is allowed to solicit and enter into negotiations with other potential buyers during this time.

Fairfax currently owns around 10% of BlackBerry, and plans to contribute its shares to the transaction.

The deal comes days after BlackBerry revealed it is expecting an operating loss for its second quarter of $950 million to $995 million, and announced plans to cut another 4,500 jobs, or 40% of its workforce. The company also announced plans to reduce its handset portfolio with a focus on the enterprise and “prosumer” markets, at the expense of the mainstream consumer sector.

Analysts are skeptical whether privatizing the vendor will help turn it around. “Taking BlackBerry private doesn't solve the fundamental problems at the company,” Ovum chief telecoms analyst Jan Dawson said. “The company's device sales are cratering, and its announcement last week that it no longer intends to pursue the consumer market is essentially the death knell for this business.”

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