After a weekend of job cut reports and a delayed BlackBerry Messenger (BBM) roll out for iPhone and Android, Waterloo-based smartphone operator BlackBerry signed a letter of intent agreement for a potential $4.7 billion sale of the company to its largest shareholder, Fairfax Financial Holdings. The Toronto-based company — which currently owns 10 per cent of BlackBerry’s shares — will give $9 for each share to the remaining shareholders, as well as move the company into a private setting.
Under the agreement, Fairfax would lead a consortium to purchase BlackBerry, subject to due diligence. The diligence, or the details and the negotiations of the agreement, are to be completed by November 4, 2013, according to a press release on BlackBerry’s website. However, during this period BlackBerry is allowed to receive other offers from different companies. The press release stated that there is no promise that the “due diligence will be satisfactory.”
In the summer months, BlackBerry’s board of directors struck up a special committee to evaluate the company’s future.
“The special committee is seeking the best available outcome for the company’s constituents, including for shareholders. Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium,” Barbara Stymiest, chair of BlackBerry’s board of directors, said in a statement released by the company today.
Prem Watsa, the chairman and CEO of Fairfax, also said in the press release they “believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees.”
On Friday, it was reported that BlackBerry would cut 4,500 of its global workforce, with the number of workers being laid off in Waterloo still unknown. On Saturday and Sunday, the smartphone developer was expected to released their BBM platform for Android and iOS, but an early version of the messaging app was leaked, therefore causing BlackBerry to pause the global roll out.
More to come.