A major player in the Canadian insurance field is leading a consortium to buy BlackBerry, announcing a (US)$4.7 billion deal Monday for the beleaguered tech-giant.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” said Prem Watsa, Fairfax Holdings chairman and chief executive in a statement to the press. “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.”
Fairfax Financial Holdings. Ltd., a Canadian investment firm primarily focused on the insurance industry, has offered (US)$9 per share in cash for the smartphone maker. Some of the more notable companies within the Fairfax corporate sphere include Crum & Forster, Northbridge Financial and Zenith, along with reinsurers Advent, Group Re and Odyssey Re.
The announcement comes on the heels of the Friday announcement from BlackBerry that it was cutting 4,500 jobs.
The consortium will acquire all of the outstanding shares of BlackBerry not held by Fairfax, which owns approximately a 10 per cent of the Waterloo, Ont.-based company, following a six-week period to conduct due diligence, during which time BlackBerry will be allowed to shop for a better deal. (continued.)
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The chair of BlackBerry’s board of directors, Barbara Stymiest, said they are looking for the best possible outcome for the company’s situation.
“The go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium,” Stymiest said in a press release.
Fairfax’s Watsa said that the deal will open a new and exciting chapter for BlackBerry and its customers.
The offer halted trading of BlackBerry stocks worth only half of what they were in January. Trading resumed at 2 p.m.
The BlackBerry board of directors has approved the terms of the letter of agreement.
BlackBerry shares were down 60 cents at $8.48 on the Toronto Stock Exchange before a trading halt. After trading resumed at 2 p.m. ET, the shares jumped to $9.25 in Toronto and (US)$9.03 on the Nasdaq market in the United States.
BlackBerry shares have been traded at less than half the value they had in January ahead of the launch of its first smartphones running its new BlackBerry 10 operating system.
However, the launch of BB10 fizzled and the new devices failed to spark consumer interest.
