BlackBerry has signed the letter of intent, which sets the wheels in motion for this deal to be finalized by 4th November. But, nothing is confirmed yet.
In a week that has been filled with no so pleasant news for BlackBerry, finally some better news has come along. A group of companies spearheaded by Canadian holding company Fairfax Financial has tabled a $4.7 billion offer to buy out the smartphone major, which BlackBerry has agreed to by signing the letter of intent. According to the deal, BlackBerry shareholders would receive U.S. $9 in cash for each share they hold. This comes a month after BlackBerry announced that it was setting up a special committee to explore various options.
The due diligence period is underway, and it is expected that the deal will be completed by 4th November, a month and a bit from now.
Barbara Stymiest, Chair of BlackBerry’s Board of Directors, said: “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.”
Prem Watsa, Chairman and CEO of Fairfax, 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.”
However, the official statement from BlackBerry does warn that any deal is far from finalized. The caution comes in the form of, “In addition to the consortium and its lenders being satisfied with all aspects of the due diligence to be carried out by them during the Diligence Period and the negotiation and execution of a binding definitive agreement approved by the board of BlackBerry, completion of the transaction will be subject to other customary conditions, including receipt of required regulatory approvals. There can be no assurance that due diligence will be satisfactory, that financing will be obtained, that a definitive agreement will be entered into or that the transaction will be consummated.”
Dismal smartphone sales of the BB10 devices – the Z10 and the Q10, have increased BlackBerry’s woes.
This is certainly better news for BlackBerry, in a week where it announced that it would be laying off 4500 people, after dismal financial results. The company sold only 3.7 million smartphones in the second quarter of this year. This number pales when compared to 9 million units of the two new iPhones were sold in three days. Also, the BlackBerry Messenger rollout for Android and iOS hit some technical issues, and the future date of availability is not yet clear.