Fairfax offers $ 4.7 billion for BlackBerry after Microsoft’s $ 7.17 billion bid for Nokia’s devices unit

BlackBerry Z10 - Canada's Fairfax has expressed intent to buy the brand.
BlackBerry Z10 – Canada’s Fairfax has expressed intent to buy the brand.

Less than a month since Microsoft announced that it would buy Nokia’s device unit for   US $ 7.17 billion, Fairfax has now expressed interest in BlackBerry.

BlackBerry yesterday announced that it had entered into Letter of Intent agreement (“LOI”) under which a consortium to be led by Canada’s Fairfax Financial Holdings Limited has offered to acquire the company for US $ 4.7 billion subject to due diligence.

According to the announcement, the LoI “contemplates a transaction in which BlackBerry shareholders would receive U.S. $9 in cash for each share of BlackBerry share they hold,” while the consortium would acquire for cash all of the outstanding shares of BlackBerry not held by Fairfax. Fairfax currently owns approximately 10 percent of BlackBerry’s common shares.

“Diligence is expected to be complete by November 4, 2013.  The parties’ intention is to negotiate and execute a definitive transaction agreement by such date.   During such period, BlackBerry is permitted to actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals,” states the BlackBerry statement.

Barbara Stymiest, Chair of BlackBerry’s Board of Directors, said: “The Special Committee is seeking the best available outcome for the Company’s constituents, including for shareholders. Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.”

Prem Watsa, Chairman and CEO of Fairfax, said: “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. 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.”

Should the deal go through, it will mark the turning point for the BlackBerry brand which revolutionized the mobile industry when it was introduced in 1999.


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