BlackBerry going private, agreed to $4.7 billion sale

BlackBerry has agreed to be bought by a consortium of Canadian investment companies for $4.7 billion in cash and taken private, in a last resort move to ensure the survival of one of the pioneers of the global smartphone industry.

Once called CrackBerry the smartphone manufacturer was widely and compulsively used by the world’s business and political elite. Company has seen its market value plummet from a peak of $83 billion in 2008 to just $4.2 billion ahead of the announcement Monday.

The consortium is led by Prem Watsa’s Fairfax Financial, which holds a 10% stake in the Ontario-based group. Mr Watsa, an investor who has been called Canada’s Warren Buffett, quit BlackBerry’s board last month when the company announced that it had set up a special committee to investigate its strategic options.

The BlackBerry board said it had approved the terms under which the consortium would take company private subject to a number of conditions, including confirmation of materials, negotiation of a definitive agreement and customary regulatory approvals.

“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”, Prem Watsa, Fairfax chief executive said.

The company’s stock price has declined by 30% so far this year. The Canadian smartphone giant has been badly beaten in the smartphone wars. Mr Watsa signalled that as a privately held company the focus would be on enterprise solutions.

“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” he said. “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.”

Ben Wood, chief of research at CCS Insight, said for Financial Times: “At this stage further bids on BlackBerry’s assets cannot be ruled out, but this certainly marks a new chapter in the destiny of the company whether this bid is accepted or a rival offer materializes.”