Troubled BlackBerry agrees sale
Published 23/09/2013 | 19:41
Troubled smartphone maker BlackBerry has agreed a deal that will see it sold to a consortium led by its largest shareholder for 4.7 billion dollars (£2.85 billion).
The Canadian firm, which had its European headquarters in Slough, Berkshire, said it had signed a letter of intent agreement with Fairfax Financial over a nine dollars per share cash deal.
It comes days after BlackBerry, one of the pioneers of the smartphone industry, revealed it expected to make a loss of a billion dollars (£606 million) after disastrous sales of its new handsets, and would lay off 4,500 staff.
Canadian billionaire investor 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."
Sales of shares in the Nasdaq-listed company, which plunged after Friday's announcement, were halted after the news of the deal which would take it private. BlackBerry, which started in 1999, is known for the loyalty of its users, who include Barack Obama.
It carried out a high-profile launch of two new handsets at the start of the year, the much delayed Z10 touchscreen and Q10 with a qwerty keyboard, which went on sale later in the year. A new phone, the touchscreen Z30, was unveiled last week.
But the new handsets failed to win over critics and sales were far below what the firm was hoping for. Its market share in the first quarter of this year was 2.9%, according to analysts, compared to 41% in 2007.
BlackBerry said it had set up a special committee in August to look at the financial alternatives for the company in the face of its poor trading figures. The agreement with Fairfax allows it to "go shop" for alternative offers for the firm should they become available during the due diligence process, which is expected to take until November 4.