Home > Finance, Technology > BlackBerry Reaches $4.7 Billion Deal to Go Private

BlackBerry Reaches $4.7 Billion Deal to Go Private

Monday, September 23rd, 2013 Leave a comment Go to comments

After months of uncertainty about the company’s future and watching its market share continue to plummet, BlackBerry announced earlier today that it had reached a preliminary agreement to be taken private by a group led by Fairfax Financial Holdings (one of BlackBerry’s biggest shareholders). The announcement comes just days after the Canadian company announced that it would lay off about 40 percent of its employees, 4,500 people, and report a $1 billion quarterly loss.

Here are some excerpts from DealBook about the reported deal:

  • “The company signed a letter of intent that would pay shareholders $9 a share in cash, a deal that values the faltering smartphone maker at about $4.7 billion, according to a press release. Fairfax, a Canadian insurer, already owns 10 percent of BlackBerry.”
  • “Fairfax and its co-investors are seeking financing from Bank of America Merrill Lynch and BMO Capital Markets. BlackBerry and Fairfax agreed to complete due diligence by Nov. 4. During this time, BlackBerry is permitted to enter into talks with other potential acquirers. The press release did not identify the other investors joining with Fairfax.”
  • “If BlackBerry backs out of the potential Fairfax deal or finds another buyer, it would owe Fairfax a fee of 30 cents a share, or $157 million. It would owe Fairfax $262 million if it walked away from a signed agreement.”

 

Also, check out this chart that highlights BlackBerry’s steep decline in market share for U.S. operating systems:

WSJ_BB-674561ce-247e-11e3-92b9-12313b087694-large

Source: WSJ

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