BlackBerry receives offer from group led by Fairfax
Posted September 23, 2013 3:09 pm.
This article is more than 5 years old.
BlackBerry has received an offer from a group led by Fairfax Financial.
Fairfax, which already has 10 per cent stake in BlackBerry, puts the value of BlackBerry at $4.7-billion (U.S.) or $9 per share.
The price was above the smartphone maker’s recent value on public markets, following the company’s announcement Friday that it will cut about 40 per cent of its global workforce, about 4,500 jobs, and record a writedown of nearly $1-billion.
Under the deal announced Monday, the group will acquire all of the outstanding shares of BlackBerry not already held by Fairfax.
The group has been given six weeks to conduct due diligence. Until then, BlackBerry is allowed to actively solicit and evaluate rival offers.
BlackBerry’s board has approved the terms in the letter of intent.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Fairfax chairman and chief executive 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.”
BlackBerry shares have been traded at less than half the value they had in January ahead of the launch of its first smartphones running its new BlackBerry 10 operating system.
However, the launch of BB10 fizzled and the new devices, failed to spark consumer interest.
On Friday, the company said it plans a writedown of up to $960-million in the second quarter, primarily from poor sales of its BlackBerry Z10 touchscreen smartphones.
It will also book a $72-million restructuring charge related to changes in its operations, which include previous layoffs.
BlackBerry says it expects to post a loss of $950-million to $995-million for the fiscal second-quarter. It also projected US$1.6 billion in sales, far short of analyst expectations of about US$3 billion.
Fairfax Financial Holdings. Ltd. is a Toronto-based investment firm primarily focused on the insurance industry.
