BlackBerry agrees $4.7 billion buyout with Fairfax Financial
Canadian firm BlackBerry is having a bit of a rollercoaster week (well, year would be more accurate) as over the past 3 days the company announced a shocking 4500 job cuts to its global workforce and today a purchase agreement by Fairfax Financial has been agreed for $9 (£5.63) per share in cash to buy the company, equating to a $4.7 billion buyout.
Fairfax Financial already owns a 10% share in BlackBerry making it BB’s biggest existing stakeholder, but now the company has put the motions in place to buy out BlackBerry in full for $4.7 billion (£3 billion).
In the past 12 months BlackBerry has been fighting something of a losing battle and at the start of 2013 the company took a big swing at the Android and iOS dominated mobile market by launching the brand new BlackBerry 10 operating system and a range of BB10 running devices. The handsets were well received by many reviewers but sales for BB10 sporting devices have been poor and BlackBerry since has suffered.
On Friday of last week the company announced that it would be cutting 4,500 jobs in a bid to stem losses and recoup costs, in light of the company’s result financial guidance report which showed that BlackBerry is expected to show a loss of $1 billion this year.
The company announced that it has entered into Letter of Intent with Consortium led by Fairfax Financial yesterday on its website where the Chairman and CEO of Fairfax, Prem Watsa, has 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.”
The purchase will now enter due diligence which will be carried out by Fairfax and during the diligence period the negotiations and execution of a binding definitive agreement approved by the board of BlackBerry and completion of the transaction will be subject to other customary conditions, including receipt of required regulatory approvals.
There are still a lot more steps to take before BlackBerry is purchased and what this will lead to for the new owners and existing staff is still a mystery, but what we do know is that BlackBerry was already on hard times, so a new owner could be just what it needs to change the future of the once great tech company.