Sep 25, 2013

    BlackBerry gets lifeline thanks to buyout offer

    TECH pioneer BlackBerry made a last roll of the dice on Monday, agreeing to a probable US$4.7-billion (S$6-billion) buyout by a consortium planning to take the struggling smartphone-maker private.

    Analysts reacted with measured optimism.

    "This is probably the best possible outcome of several unattractive options for BlackBerry," said analyst Jack Gold of J. Gold Associates.

    BlackBerry was once a leader in mobile technology, but has been squeezed by Android and Apple.

    The Ontario-based company said it has signed a letter of intent with a group led by Fairfax Financial Holdings, which has offered to acquire the company.

    Fairfax, a Canadian firm headed by billionaire Prem Watsa, is already BlackBerry's largest shareholder, with approximately 10 per cent of its shares.

    Mr Watsa said the sale "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."

    The announcement came on the same day that Apple said it sold a record nine million iPhones in three days, after launching two new versions of its smartphone last week.

    Under the proposed BlackBerry-Fairfax deal, the consortium would offer US$9 for each outstanding share, and Fairfax would contribute its own shares in the transaction.

    A firm deal is expected by Nov 4, once due diligence is completed. It also hinges on the consortium obtaining financing.

    BlackBerry said it would continue the search for a possibly better suitor in the meantime.