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BlackBerry agrees to preliminary deal to sell for $4.7 billion


News by Andrew Kameka on Monday September 23, 2013.

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BlackBerry, once the biggest name in mobile and worth more than $200 billion at its peak period in 2007, may soon be sold for less than $5 billion, according to a statement issued by the former smartphone giant. BlackBerry has signed a Letter of Intent to sell the company to a group of investors led by Fairfax Financial Holdings Limited. Fairfax currently owns about 10 percent of BlackBerry's shares.

Trading of BlackBerry's stock was halted last week when the company announced that it had more than $1 billion in unsold inventory, planned to layoff half of its workforce, and would soon exit the consumer smartphone business. Withs stock trading at $8.23 per share when the sale was announced, and rising quickly at the time this article was published, BlackBerry will sell all common shares to Fairfax for $9 per share, valuing the company at $4.7 billion. The current valuation represents a 50 percent decline from the $18 per share BlackBerry once trade after the announcement of BlackBerry 10.

Fairfax's acquisition of BlackBerry is contingent on a due diligence period in which Fairfax will audit the BlackBerry business and finalize a deal. BlackBerry says that it expects to negotiate a deal by November 4, 2013. BlackBerry is allowed to solicit deals from other groups during that period and would pay a penalty of 50 cents per share if it breaks away from the sale.

source: BlackBerry

 
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Andrew Kameka
Andrew is MobileBurn.com's managing editor. He is based in Miami, Florida.

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