Struggling
smartphone maker Blackberry has agreed a deal with Fairfax Financial Holdings
Limited which will see the Canadian company pulled off the stock market and
taken private. The deal to buy blackberry is worth about $4.7 billion which is
the calculated worth of the company at a perilous moment for the company.
The deal was
announced by Blackberry on Monday, 23rd of this month. The company is headed by
Prem Watsa who was a former member of the board of directors of Blackberry
before he resigned from the board.
“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,” he said
The company
currently owns 10% of Blackberry and it is expected that shareholders will earn
$9 per share after the deal is finalized.
The deal will
be financed by Bank of America Merill Lynch and BMO Capital Markets. The funds
for the takeover must be ready in 6 weeks time and Blackberry also has an
option to listen to better offers if there is any.
“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.
Blackberry
recently revealed a loss of almost $1 billion in the second quarter alone and its
intention to relieve 4,500 employees, about 40% of its workforce of their
duties.
In 2008 at
its peak value as a leading smartphone maker, a share of Blackberry was $148
and the company was worth about $83 billion. But then time has changed the
fortunes of the Canadian phone maker and Google and Apple are now in the
forefront of the fiercely competitive smartphone race.
Recently
Michael Dell also bought Dell Corporations to take it private in the face of
woes for the PC maker.
What do you
think about Blackberry’s acquisition? Do you still think they will survive and
come up the ladder again in the smartphone market?
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At last, Blackberry finds a buyer