BlackBerry agrees to US$4.7bn buyout

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BlackBerry has agreed to a buyout by Toronto-based financial holding company Fairfax Financial Holdings, which owns about 10 per cent of the mobile company's shares.

(Credit: BlackBerry)

BlackBerry has announced that it has signed a letter of intent to be acquired for US$4.7 billion by a consortium led by Fairfax Financial Holdings, with shareholders to be bought out at US$9 per share — slightly more than the stock market price of US$8.23 at the time of the announcement.

On Friday, the mobile company announced that it anticipated a second-quarter loss of at least US$950 million and would be axing 4500 jobs — around 40 per cent of its employees globally. This year, BlackBerry's stock has fallen 30 per cent.

The consortium has until 4 November to complete its diligence, during which time BlackBerry is free to "actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals", the announcement said.

If the deal goes through — and we suspect BlackBerry won't be receiving a better offer — this potentially spells the end for BlackBerry hardware, as the company removes itself from both public scrutiny and the consumer market to concentrate on enterprise.

"We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees," chairman and CEO of Fairfax Prem Watsa said in a statement. "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."

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