BlackBerry reaches tentative $4.7 billion deal to go private

Tuesday 24 September 2013 12.17
Chief executive Thorsten Heins had bet the Z10 would become BlackBerry's new flagship smartphone
Chief executive Thorsten Heins had bet the Z10 would become BlackBerry's new flagship smartphone

BlackBerry has entered a tentative agreement for a $4.7 billion buyout offer from a group led by its biggest shareholder, Fairfax Financial Holdings Ltd.

The Fairfax-led group would offer $9 a share, according to a statement today - a 3.1% premium over BlackBerry’s closing price last week.

The buyers will have six weeks to scrutinise BlackBerry’s books, a span in which the smartphone maker can seek other takeover offers.

The Ontario-based company said last week that it will cut 4,500 jobs and take a writedown of as much as $960m for unsold inventory of its Z10 phone - a touchscreen device unveiled in January as its answer to the iPhone.

Chief executive Thorsten Heins had bet the Z10 would become BlackBerry’s new flagship, restoring cachet and prosperity to the one-time smartphone leader. Instead, the model fizzled with consumers and contributed to the company’s weakest quarterly sales in six years.

BlackBerry, credited with inventing the first smartphones more than a decade ago, once sold products that were so popular and addictive they were known as CrackBerrys.

But in recent years, the company failed to keep pace with Apple and Samsung Electronics, which offered better web browsing and a wider range of applications.

BlackBerry’s share of the global smartphone market shrank to 2.9% in the second quarter from 4.9% a year earlier, according to IDC. It has fallen to fourth place behind Google’s Android, Apple’s iOS and Microsoft's Windows Phone platform.