A former BlackBerry board member is spearheading a US$4.7-billion offer to purchase the Waterloo-based company.
Prem Watsa is the chief executive officer of Fairfax Financial Holdings, which is leading a consortium offering to purchase each share of BlackBerry it doesn’t already own for US$9 in a friendly takeover.
He was appointed to BlackBerry’s board in 2012, and resigned last month to shield himself from potential conflicts of interest.
Watsa – who was first attracted to the company because of his friendship with co-founder Mike Lazaridis – says he has confidence BlackBerry will be able to escape its current difficulties and return to success.
"We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees," he said in a press release.
Fairfax, which currently owns about 10 per cent of BlackBerry, is undertaking the takeover with the support of partners who wish to remain anonymous until six weeks of due diligence are completed.
The BlackBerry board of directors has approved the terms of the letter of agreement.
During the due diligence phase, BlackBerry is allowed to solicit and evaluate rival offers.
CTV News chief financial commentator Pattie Lovett-Reid says it’s unlikely, but not impossible, for a better deal than the Fairfax offer to emerge.
“This is where the company can go out to shop and see whether they can get a better offer,” she says.
“Many suspect that is not going to be the case.”
Trading of BlackBerry shares were halted on both the Toronto Stock Exchange and the NASDAQ before the announcement, resuming at 2 p.m. with prices rising as high as $9.25 on the TSX and $9.03 on the NASDAQ.
By the end of the day, shares were trading at $9.08 on the TSX (even with Friday's close) and $8.82 on the NASDAQ (up 9.5 cents).
Last week, BlackBerry announced plans to shed 4,500 employees and write down more than $900 million in unsold phones.
In a Monday morning interview with CTV News – during which the impending announcement was not mentioned – BlackBerry managing director Andrew MacLeod said it was too early to tell how many of the affected employees would be based in Waterloo.
“Pretty much every division of the company will have to play a role,” he said.
Lovett-Reid says going private would allow BlackBerry to refocus and reinvent itself around the aspects of its business most likely to remain successful.
Watsa has been the University of Waterloo's chancellor since 2009 and has previously referred to himself as a “big supporter” of BlackBerry CEO Thorsten Heins.
BlackBerry formally announces its second-quarter financials on Friday, but the company has said it expects to record a loss of nearly $1 billion due to the writedown.
At its peak in 2008, BlackBerry was worth around $84 billion.
With files from The Canadian Press
