$4.7Bn Buyout To Save BlackBerry?
|Phone giant biggest shareholder, Fairfax, in buyout deal worth $4.7 billion, announced overnight.
BlackBerry has signed a letter of intent with a consortium led by Fairfax Financial Holdings Limited to acquire the company, following approval by BlackBerry’s Board of Directors special committee, formed in August to review strategic alternatives.
According to the letter, Fairfax, the struggling mobile giant’s biggest shareholder, has offered to acquire BlackBerry, under which shareholders would receive U.S. $9 per share in cash. It already has 10% share in the Canadian phone giant, and would acquire all outstanding shares not held for cash.
Fairfax, a Canadian insurance company, intends to contribute the shares of BlackBerry it currently holds into the transaction.
The consortium is seeking financing from BofA Merrill Lynch and BMO Capital Markets.
Several other parties, too, are keen to make a bid for Blackberry, reports Wall Street Journal, citing sources.
Prem Watsa, Chairman and CEO of Fairfax, believes a private setting will be good for the phone company, considered a national treasure in Canada.
“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.”
“I know most people don’t think so, but we think over time [BlackBerry] can be successful again,” he told WSJ.
The original smartphone maker loved by business execs globally has fallen into disarray, of late.
Recent figures by analysts Gartner show BlackBerry OS marketshare halved in Q2 ’13 to just 2.7%, pipped by newcomer Microsoft and the two titans of the mobile industry, iOS and Android.
|BlackBerry shares rose marginally after the buyout proposal went public but are still at historic lows, hovering at around $8.80.
The buyout deal is subject to due diligence, which is be complete by November 4.
Barbara Stymiest, Chair of BlackBerry’s Board of Directors, said: “The Special Committee is seeking the best available outcome for the Company’s constituents, including for shareholders.”
BlackBerry is due to announce Q2 result this Friday, likely to be horrific if any of the news emerging from the company, of late, is anything to go by.