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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms 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.
Five Patients Given Experimental Ebola Drug Said to Be Improvingi
X
Carol Pearson
August 19, 2014 11:43 PM
The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.
Video

Video For Obama, Racial Violence is Personal Issue

The racial violence in the St. Louis suburb of Ferguson is presenting U.S. President Barack Obama with an issue to which he has a deep personal connection. To many Americans, Obama's election as America's first black president marked a turning point in race relations in the United States, and Obama has made ending the violence a policy priority. On Monday he issued a new call for calm and understanding. Luis Ramirez reports from the White House.
Video

Video Clinton-Obama Relationship Could Impact 2016 Election

President Barack Obama and former Secretary of State Hillary Clinton have a long and complicated relationship. That relationship took another turn recently when Clinton criticized the president’s foreign policy. VOA National Correspondent Jim Malone reports there is renewed attention on the Clinton-Obama relationship as Hillary Clinton considers running for
Video

Video Iran Looks to Maintain Influence in Baghdad With New Shia PM

Washington and Tehran share the goal of stopping Syrian-based militants in Iraq. But experts say it's Iran, not the United States, that will most influence how the new government in Baghdad approaches internal reforms and the war in Syria. VOA State Department Correspondent Scott Stearns has the story.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.