BLACKBERRY COMPANY FINALLY SOLD OUT TO PRIVATE COMPANY.

BlackBerry
announced Monday it has agreed to
a $4.7 billion buyout by a
consortium of investors who plan to
take the struggling Canadian
smartphone maker private.
The company said in a statement
that it has “signed a letter of intent
agreement under which a consortium
to be led by Fairfax Financial
Holdings Limited has offered to
acquire the company subject to due
diligence.”
Fairfax, a Canadian firm headed by
billionaire Prem Watsa, is already
BlackBerry’s largest shareholder with
approximately 10 percent of its
shares. Watsa resigned from
BlackBerry’s board when it
announced in August its intentions
to search for a suitor.
Under the proposed deal the
consortium would offer $9 for each
outstanding share, and Fairfax would
contribute its own shares in the
transaction.
BlackBerry said its board of directors
support the plan.
A firm deal, once due diligence is
completed, is expected to be
announced by November 4. It hinges
also on the consortium obtaining
financing.
BlackBerry said it would continue a
search for a possibly better suitor in
the interim.
BlackBerry stock was down six
percent to $8.23 before trading was
halted just prior to its
announcement. Its shares climbed
back up to $9.07 in afternoon
trading.
Analysts meanwhile reacted with
measured optimism.
“This is probably the best possible
outcome of several unattractive
options for BlackBerry,” said analyst
Jack Gold of J. Gold Associates.
While BlackBerry helped create a
culture of mobile users who were
glued to the company’s
smartphones, many of those
customers have since moved to
Apple iPhones or other device
makers such as Samsung, mainly
using Android.
According to International Data
Corporation (IDC), BlackBerry’s global
market share had slipped to 3.7
percent in the second quarter, the
lowest since tracking began, while
Android accounted for nearly 80
percent.
The company formerly known as
Research In Motion

unveiled a new
corporate name and a new platform
in January as it sought to regain
momentum, but its most recent
numbers suggest this has been a
spectacular failure.
On Friday, the company announced
it was laying off 4,500 staff or one-
third of its global workforce after a
dismal launch of new smartphones
earlier this year that were meant to
revive BlackBerry.
It also said it expected to post a
nearly $1 billion loss in the second
quarter due to writedowns linked to
poor sales of its new Z10
touchscreen smartphone, a device
aimed specifically at competing
against Apple and Android devices.
Gold and other analysts said going
private — and possibly returning
company founder Mike Lazaridis at
the helm, as has been rumored —
would give the company breathing
room to “put the house in order.”
Going forward, BlackBerry would be a
much smaller player in handheld
devices, but “being private would
mean that Wall Street is not
continuously breathing down their
neck,” said Gold.
Furthermore, its key enterprise
customers may not feel as compelled
to replace their BlackBerry
smartphones and servers for fear
that the company is going out of
business.
“It could provide them with cover to
re-architect the company even more
than they are now,” said Gold.
The company’s sustainability,
however, still remains in doubt for
most.
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