BlackBerry receives offer to be taken private for $4.6 billion

Beleaguered mobile device maker BlackBerry has received an offer to be taken private for $4.6 billion. 

The company's board of directors has approved the terms of a letter of intent from a consortium of investors led by Fairfax Financial Holdings, which already owns a 10% stake in the company. 

The deal, which is still subject to regulatory approval and any counter offers BlackBerry may receive, would give every shareholder $7 per share. 

Before the deal was announced, BlackBerry's share price was $8.8. This is down from roughly $10 since it announced preliminary financial results on Friday. 

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

Chairman of BlackBerry's board of directors, Barbara Stymeist, pointed out the "go-shop" period allows the company to "determine if there are alternatives superior to the present proposal from the Fairfax consortium”.

Commenting on the news, mobile technology analyst Jack Gold wrote that Fairfax's offer "is probably the best possible outcome of several unattractive options for BlackBerry".

"It would provide them with some financial stability so its enterprise customers would not feel compelled to replace them for fear of going out of business," he wrote. 

"Can BB ultimately survive? That’s not as clear."

The news is the culmination of a disastrous few days for BlackBerry. On Friday, it warned investors that it expects it incur a $995 million loss in the current quarter as it writes down a huge quantity of unsold smartphones. 

It announced plans to refocus on the enterprise and "prosumer" market, and confirmed reports that it is to cut 4,500 employees in the next year. 

Over the weekend, BlackBerry was forced to postpone the launch of an Android-version of its BlackBerry Messenger (BBM) app, after the app was leaked online early. 

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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