We have noticed you are using an ad blocker
To continue providing news and award winning journalism, we rely on advertising revenue.
To continue reading, please turn off your ad blocker or whitelist us.
BlackBerry has received a $4.7bn (£2.9bn) offer from one of its largest shareholders to buy the struggling smartphone maker and take the company private.
The company said it had signed a letter of intent agreement, under which a consortium led by fellow Canadian company Fairfax Financial Holdings Limited has offered to acquire the phone maker, subject to due diligence.
The letter states Fairfax's purchase of BlackBerry would give each shareholder $9, valuing the company at approximately $4.7 billion - this compares in shareholders' favour to the stock's current price of $8.83 a share.
Fairfax, which is led by Canadian investor Prem Watsa and owns approximately 10% of BlackBerry's common shares, intends to contribute these shares into the takeover deal.
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."
A special committee, chaired by Director Tim Dattels, was set up in August this year to seek alternatives for the company, which has undergone years of decline after being caught wrong footed by Apple with the arrival of the original iPhone in 2007.
Diligence for the proposed buyout is due to be completed by 4 November and it is both Fairfax's and BlackBerry's intention to complete the deal by this date; shortly after the special committee was set up, insiders claimed the phone maker was seeking a quick sale that would be completed as soon as November.
BlackBerry shareholders reacted positively to the news of a potential takeover, with the share price up around 1% having plummeted more than 17% three days previous, when the company announced 4,500 redundancies and forecast $1bn of losses for the current financial quarter. A $960 million write-down of unsold BlackBerry Z10 stock made up the majority if these losses.
Speaking after the layoffs were announced, CEO Thorsten Heins said: "Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user.
"This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."
Heins had bet big on the success of the Z10, which was launched in January alongside the new BlackBerry 10 operating system amid a major brand relaunch.
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."