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

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' 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.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8033
JPY
USD
117.19
GBP
USD
0.6372
CAD
USD
1.1634
INR
USD
63.622

Rates may not be current.