BlackBerry was once a leader in mobile technology, but has been squeezed by rivals Android and Apple smartphones.
BlackBerry Ltd. said on Monday that Fairfax Financial Holdings Ltd. has signed a letter of intent that “contemplates” buying the company for $9 per share in cash in a deal that would take the company private. The tentative deal comes just days after the Canadian company announced plans to lay off 40 per cent of its global workforce. The offer price is below BlackBerry was trading at before the layoff announcement.
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Gillis said taking BlackBerry private is the right move and that it’s possible that BlackBerry could survive in a much smaller form. He noted that the $9-per-share offer is lower than the $12.32 average price that the stock traded over the past six months.
BlackBerry said the general terms of the deal have been approved by its board and a special committee set up to review options. The company said it will negotiate and execute a definitive transaction agreement with Fairfax by November 4.
Although BlackBerry was once Canada’s most valuable company with a market value of $83 billion in June 2008, the stock has plummeted from more than $140 a share to less than $9, giving it a market value of $4.6 billion, just short of Fairfax’s offer.
The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers. It could be so addictive that it was nicknamed “the CrackBerry.” President Barack Obama couldn’t bear to part with his BlackBerry. Oprah Winfrey declared it one of her “favourite things.” But then came a new generation of competing smartphones, starting with Apple’s iPhone in 2007. The BlackBerry, that game-changing breakthrough in personal connectedness, suddenly looked ancient.