BlackBerry agrees to $4.7bn takeover deal with Fairfax
Struggling smartphone company accepts offer from its biggest shareholder - but is it too late?
BLACKBERRY has agreed to a takeover offer of $4.7bn from its biggest shareholder. Fairfax Financial, a Canadian private equity consortium which already owns 10 per cent of Blackberry, will pay $9 a share for the struggling smartphone company.
The figure is a small premium on Friday's closing price of $8.23, but nothing compared with the $147.55 that marked BlackBerry's peak in June 2008, reports The Times.
Maker of what was once the most sought-after device in the business world, BlackBerry has struggled recently to keep up with rivals Samsung and Apple. In a bid to stem losses, it announced last week it was cutting 4,500 jobs.
In the past year its shares have plummeted by 30 per cent, and by 92 per cent over the past five years. Last month the company formed a special committee to consider different business models and at the same time put itself up for sale.
By taking BlackBerry private, Fairfax will try to turn the business round away from the public spotlight. Fairfax's owner, Prem Watsa, said the deal was an exciting new chapter for BlackBerry and would "deliver immediate value to shareholders".
The Fairfax-led consortium will have six weeks to conduct due diligence. BlackBerry has agreed to the deal in principle but can pursue alternative offers. However, if BlackBerry decides to go elsewhere, it would have to pay Fairfax a termination fee of between $157m and $261m.
Ben Wood, chief of research at market analysts CCS Insight, said: "Irrespective of this bid, questions around BlackBerry's future remain unchanged. It seems unlikely it can continue as it is and while the most attractive option is to focus on business users, tough decisions will need to be made about which parts of the business to persevere with and which pieces to spin off or abandon."
Jan Dawson, of Ovum, agreed, telling the Financial Times: "Unless Fairfax plans to radically change or accelerate BlackBerry's strategy, it's unlikely to be able to turn the company round. And that means we're likely seeing the beginning of the end for one of the most iconic brands in mobile technology." ·