BlackBerry agrees to $4.7 billion buyout by Fairfax-led consortium

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BlackBerry announced Monday it has agreed to a $4.7 billion buyout through a consortium of investors who plan to take the struggling Canadian smartphone maker private.

The corporate mentioned in a observation that it has “signed a letter of intent agreement under which a consortium to be led by Fairfax financial Holdings limited has supplied to obtain the corporate topic to due diligence.”

Fairfax, a Canadian agency headed by way of billionaire Prem Watsa, is already BlackBerry’s biggest shareholder with approximately 10 percent of its shares. Watsa resigned from BlackBerry’s board when it introduced in August its intentions to search for a suitor Net Maddy.

Below the proposed deal the consortium would provide $9 for every prominent share, and Fairfax would contribute its own shares in the transaction.

BlackBerry mentioned its board of directors improve the plan.

An organization deal, as soon as due diligence is finished, is predicted to be introduced through November four. It hinges also on the consortium obtaining financing.

BlackBerry said it would proceed a seek for a possibly higher suitor in the intervening time.

Markets halted trading of BlackBerry simply prior to its announcement. Its inventory price used to be down six p.c to $eight.23.

Analysts reacted with measured optimism.

“This is almost definitely the very best conceivable result of several unattractive choices for BlackBerry,” said analyst Jack Gold of J Gold mates.

Whereas BlackBerry helped create a tradition of cellular customers who were glued to the corporate’s smartphones, a lot of those clients have in view that moved to Apple or other smartphone makers reminiscent of Samsung, primarily the use of Android.

On Friday, the company announced it was laying off 4,500 team of workers or one-0.33 of its global personnel after a dismal launch of latest smartphones previous this yr that had been meant to revive BlackBerry.

It also mentioned it expected to put up an almost $1 billion loss within the second quarter due to writedowns linked to poor gross sales of its Z10 smartphone, a tool aimed specifically at competing towards Apple and Android devices.

The company’s extremely-publicized launch of the BlackBerry 10 platform earlier this yr failed to ignite gross sales.

Author: Sujoy Dhar

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