News / Economy

Fairfax Sets Floor for BlackBerry with $4.7 Billion Offer

A man silhouetted against a video screen with the Blackberry logo poses with a Blackberry Q10 in this photo illustration taken in the central Bosnian town of Zenica, September 21, 2013.
A man silhouetted against a video screen with the Blackberry logo poses with a Blackberry Q10 in this photo illustration taken in the central Bosnian town of Zenica, September 21, 2013.
Reuters
— Struggling smartphone maker BlackBerry on Monday signed a tentative deal to be acquired by a consortium led by its biggest shareholder, setting a $4.7 billion floor in the auction of the Canadian company that invented on-the-go email.
 
The consortium is led by Fairfax Financial Holdings Ltd, a property and casualty insurer run by Canadian investor Prem Watsa. It has offered $9 a share in cash for
BlackBerry, which last week said it expected to report a quarterly loss of nearly $1 billion.
 
"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," Watsa said in a statement.
 
Fairfax owns almost 10 percent of BlackBerry shares.
 
BlackBerry has until November 4 to seek superior offers, which is also the deadline for the Fairfax-led group to conduct its due diligence. Its shares, halted pending the afternoon announcement, rose to $9.20 as trade resumed but quickly slipped back to around $8.80 by mid-afternoon.
 
"This is a company that needs to go private if they have any chance," said Colin Gillis, an analyst at BGC Partners. "They'd be able to restructure outside of the public eye, take a long term view, and run the company at break even."
 
BlackBerry, based in Waterloo, Ontario, pioneered the concept of on-your-hip email with its first email pagers, offering secure email away from an office, and for years it was the must-have device for governments, businesses and lawyers.
 
But in recent years it has lost market share to the iPhone from Apple Inc and to devices using Google Inc's Android operating system.
 
BlackBerry warned on Friday it would report revenue on the sale of just 3.7 million of its phones for the entire second quarter. By contrast, Apple sold 9 million iPhone 5s and iPhone 5c models in three days after their Friday launch.
 
The asking price is far below BlackBerry's share price in the heady days before the iPhone ended its dominance of mobile communications.
 
Even in its more recent history - littered with profit warnings, job cuts and devices that often arrived late on the scene to disinterested audiences - BlackBerry shares have only dipped below $9 briefly.
 
In the past 12 months the shares have risen as high as $18.32 and fallen as low as $6.22 on the Nasdaq. BDT & Company, LLC, BofA Merrill Lynch and BMO Capital Markets are acting as financial advisors, and Shearman & Sterling LLP and McCarthy Tétrault LLP are acting as legal advisors to Fairfax in connection with the transaction.

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.