BlackBerry has finally given up the ghost and agreed a deal to sell up by signing a letter of intent with a consortium led by fellow Canadian firm Fairfax Financial for a price of $4.7 billion [£2.9 billion].
The consortium, which already owns around 10 per cent of the company, has six weeks to carry out due diligence on a deal that would see BlackBerry shareholders net $9 [£5.61] per share, and comes after 4,500 job cuts late last week.
“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,” said Prem Watsa, chairman and CEO of Fairfax.
The due diligence period, which lasts for six weeks, gives BlackBerry the chance to test the waters with any other deals on the table.
“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,” said Barbara Stymiest, chair of BlackBerry’s board of directors.
BlackBerry’s announcement halted trading in its stock until 14:00 ET when they came back onto the market and the deal follows an announcement in August that it was evaluating its option ahead of a possible sale.
The job cuts, announced on Friday, came bundled with the news that BlackBerry expects to post a loss of close to $1 billion [£620 million] in the second fiscal quarter and analysts think that taking the firm private will aid any possible recovery.
"The benefit to this sort of takeover is the ability for Blackberry and the consortium to reinvent the company without public scrutiny. It appears that the end game is going to be whether Blackberry can emerge as a niche supplier of highly-secured phones to enterprise customers and governments,” Brian Colello, analysts at Morningstar, told the BBC.
BlackBerry’s weekend wasn’t much better than the week that preceded it as its BBM apps for Android and iOS were both delayed due to a myriad of problems that affected the official launch.