Blackberry To Be Sold For $4.7bn

The manufacturers of Blackberry have agreed in principle to be sold to a consortium led by Fairfax Financial for $4.7bn.

Fairfax Financial is Blackberry’s largest shareholder with about 10% of its stock.

The buyers are offering $9 a share in cash for the transaction.
While agreeing to the deal in principle, the smart phone makers have said they would continue to
explore other options.

The Canadian smart phone company have said it is expecting a loss of up to $1bn due to poor sales of its new handsets and on Friday announced that 4,500 jobs will be shed in an effort to minimise the losses.

On Monday, the company released a statement that it had “signed a letter of intent agreement under which a consortium to be led by Fairfax Financial Holdings Limited has offered to acquire the company subject to due diligence”.

The statement continued: “Diligence is expected to be complete by November 4, 2013. The parties’ intention is to negotiate and execute a definitive transaction agreement by such date.”

Canadian billionaire Prem Watsa, Fairfax’s chairman and chief executive, said: “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.”

Blackberry’s financial crisis reached a climax this year due to disappointing sales of its new Z10 model smartphone.

Released in January – after many delays – the smart device has not thrilled consumers as much as similar products in the market from Blackberry’s competitors.

Blackberry shares, which fell 17% on Friday after its jobs cut announcement, rose just over 1% on Monday.