TechTarget

BlackBerry ponders going private with $4.7bn offer

A consortium named Fairfax Financial Holdings offers $4.7bn for the struggling mobile manufacturer but allows it to keep searching for other buyers before the deal is done

Fairfax Financial Holdings has put in an offer of $4.7bn to buy BlackBerry and take the firm private.

The mobile manufacturer has signed a letter of intent to accept the proposal from the financial firm, which already owns 10% of BlackBerry’s shares.

However, it still enables the company to seek out other bids before due diligence is completed on 4 November, meaning another company could swoop in and pick up the struggling firm. This will mean BlackBerry has to pay out $0.30 per share to Fairfax for backing out.

“The Special Committee is seeking the best available outcome for the company's constituents, including for shareholders,” said Barbara Stymiest, chair of BlackBerry’s board of directors. “Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.”

The news comes days after BlackBerry launched it most recent handset, the BlackBerry Z30, based on the BlackBerry 10 operating system. This is the fourth device it has released since the completion of its latest mobile operating system. However, the market response has not lived up to expectations, leaving the company in difficulties.

Although the idea of BlackBerry selling up has been widely praised by the industry, some are questioning whether going private is the right move.

Jan Dawson, chief telecoms analyst at Ovum, said: "Normally, companies are taken private in order to give a long-term strategy time to payoff without the hassles of short-term investor scrutiny. But BlackBerry's key problem for the last couple of years has been the lack of such a long-term strategy. It simply hasn't articulated a way to rebuild its business as its device sales drop precipitously.”

He added: “Unless Fairfax plans to radically change or accelerate BlackBerry's strategy, it's unlikely to be able to turn the company around. And that means we're likely seeing the beginning of the end for one of the most iconic brands in mobile technology."

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