You will be redirected back to your article in seconds

BlackBerry Plans to Go Private in $4.7 Bil Deal

Troubled smartphone maker BlackBerry announced that it has signed an agreement under which a consortium — to be led by Fairfax Financial Holdings — would buy the company for $4.7 billion and take it private.

Last Friday, BlackBerry announced plans to lay off 4,500 employees, about 40% of its global staff, and said it had a nearly $1 billion net operating loss last quarter.

With the restructuring, the Canadian device maker said it would focus on its core business customers and forgo marketing to consumers. BlackBerry built a strong following among business users with its trademark device, but has lost share to others in the category including Apple — which said it sold 9 million new iPhones over the past weekend — and Samsung Electronics.

The takeover is contingent on the Fairfax-led consortium securing financing for the deal. According to the companies, the investment consortium is seeking financing from Bank of America Merrill Lynch and BMO Capital Markets.

Under the proposed agreement, BlackBerry shareholders would receive $9 in cash for each share they hold. The financial consortium would acquire for cash all of the outstanding shares of BlackBerry not held by Fairfax, which owns approximately 10% of BlackBerry’s common shares and intends to contribute those into the transaction.

Shares of BlackBerry were halted prior the announcement at 1:30 p.m. Eastern, at $8.230 per share, and immediately rose to $9 per share when trading resumed. BlackBerry’s stock fell 17% on Friday after the company announced the layoffs and an expected net loss of about $950 million to $995 million for its fiscal second quarter of 2014, which ended Aug. 31.

BlackBerry said due diligence is expected to be completed on the transaction by Nov. 4. The provisions of the agreement give BlackBerry the “opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium,” Barbara Stymiest, chair of BlackBerry’s board of directors, said in a statement.

Prem Watsa, chairman and CEO of Fairfax, said in a statement that the proposed deal would 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.”

For BlackBerry’s special committee of the board, J.P. Morgan and Perella Weinberg are acting as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP are acting as legal advisors. For Fairfax, BDT & Company, LLC, BofA Merrill Lynch and BMO Capital Markets are acting as financial advisors, and Shearman & Sterling LLP and McCarthy Tétrault LLP are acting as legal advisors.

More Biz

  • 'Roxanne' Singer Arizona Zervas Signs With

    'Roxanne' Singer Arizona Zervas Signs With Columbia

    Hotly tipped singer-songwriter Arizona Zervas, whose viral hit “Roxanne” is in the top 40 of the Billboard Hot 100,  has signed with Columbia, Variety has confirmed. Since the release of the track on Oct. 10, “Roxanne” has reached nearly 50 million streams on Spotify. The single topped Spotify U.S. top tracks chart for an uninterrupted [...]

  • Jax Media at Variety New Leaders

    Jax Media Accepts Variety's Creative Leadership Award at New Leaders Cocktail Party

    This year’s Variety New Leaders event, presented by City National Bank, honored innovative visionaries in entertainment. The cocktail party was hosted on a chilly Thursday night in Lower Manhattan’s Jimmy Rooftop Bar at the James Hotel. Patrick McCarthy, senior VP and head of marketing for City National Bank, kicked off the event highlighting the new [...]

  • taylor swift, scott borchetta and scooter

    Rage Against the Big Machine: What's Driving the Taylor Swift Showdown

    The latest Taylor Swift-Scooter Braun-Scott Borchetta kerfuffle involves the sort of music business minutiae that doesn’t commonly interest the general public — in fact, it’s probably safe to say that untold thousands if not millions of people are suddenly familiar with the concept of re-recording old masters. But in blasting Braun on social media and [...]

  • Redbox

    Redbox Settles Disney Suit, Agrees Not to Sell Download Codes

    Redbox has settled its litigation with Disney, agreeing not to resell codes that allow customers to download movies. Redbox has traditionally offered DVDs for rent through its distinctive kiosks. In October 2017, the company also began offering download codes at a considerable discount compared to the price on iTunes, Amazon or other services. Redbox did [...]

  • Shari Redstone: ViacomCBS 'Can Compete With

    Shari Redstone: ViacomCBS 'Can Compete With the Best of Them'

    Shari Redstone is emphatic: ViacomCBS has plenty of resources and the scale to compete in the new world order for media giants. “We absolutely have enough scale,” Redstone said Friday morning during her Q&A held as part of the Paley Center for Media’s International Council Summit in New York. “We have an incredible library. We [...]

  • Taylor Swift

    Taylor Swift Denies Big Machine's Claims Over Song Use, 'Millions' in Debt

    In the latest salvo in a rapidly evolving media battle that has evolved over the past 15 hours, Taylor Swift refuted Big Machine Records’ claim that the company did not try to block her from using material from her early albums, which are owned by the label, in forthcoming television specials. Swift had leveled those [...]

  • Taylor SwiftTeen Choice Awards, Arrivals, Los

    Big Machine Records Denies Taylor Swift's Claims of Blocking Music Use

    UPDATED: In a statement issued early Friday morning, Big Machine Records denied Taylor Swift’s claims that they are blocking the use of her music. Swift had said in social media posts late Thursday that her former record company, which is run by Scott Borchetta and his new partner Scooter Braun, are trying to nix her plans for [...]

More From Our Brands

Access exclusive content