BlackBerry Ltd (BBRY) Agrees To $4.7 Billion Sale Led By Fairfax Financial

Posted Sep 23, 2013

BlackBerry Ltd (NASDAQ:BBRY) has agreed to sell themselves to a group of investors, led by their largest shareholders.  These shareholders have indicated that they are going to take BlackBerry private.  The lead investor is Fairfax Financial Holdings Ltd.  The investors have agreed to buy the company for $4.7 billion.

BlackBerry helped pave the way for the smartphone industry.  Unfortunately, they could not keep up with Android and iOS.

Fairfax is BlackBerry’s largest shareholder as they own roughly 10% in the company.  Several months ago, BlackBerry formed a special committee to determine the company’s strategic alternatives.  Blackberry was open to a buyout or joint venture.

When BlackBerry CEO Thorsten Heins announced the special committee in August, Fairfax chairman Prem Watsa resigned his seat on the company’s board of directors, according to the Financial Post.

BlackBerry Ltd (NASDAQ:BBRY) will receive $9 in cash per share, which values the deal at $4.7 billion.  The consortium of investors will acquire the outstanding shares of BlackBerry that is not controlled by Fairfax.  Fairfax will contribute their 10% stake into the transaction.

The consortium of investors is seeking financing from Bank of America Merrill Lynch and BMO Capital Markets.

Keep in mind that this is simply a bid with no financing.  There could be a potential bidding war, but BlackBerry likely does not have many suitors.  The diligence on the deal is expected to be complete by November 4th.

BlackBerry Ltd (NASDAQ:BBRY) announced on Friday that they will be laying off 4,500 workers and the company reported a $995 million net loss for Q2 this year.