Fairfax Financial Offers To Take BlackBerry Private For $4.7 Bln.

(RTTNews) - BlackBerry Ltd. (BBRY, BB.TO) on Monday signed a letter of intent agreement under which a consortium led by Fairfax Financial Holdings Ltd., has offered to acquire the smartphone maker for a cash-consideration of approximately $4.7 billion or $9 per share.

The offer represents a slight premium to the $8.23 that the stock is currently trading at. Post the announcement, BlackBerry stock moved up a shade above $9.

The deal which will see BlackBerry go private, comes just days after the struggling smartphone maker announced plans to trim some 4,500 employees by the year end. The company on Friday forecast a loss for the second-quarter, indicating that it will write off more than $900-million of unsold phones.

Fairfax, a Toronto-based hedge fund, currently owns approximately 10 percent of BlackBerry shares, all of which will be contributed into the transaction.

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." He also said the deal will "deliver immediate value to shareholders. "

The terms of the Letter Of Intent was approved by the BlackBerry Board of Directors, acting on the recommendation of a special committee. The acquisition is, however, subject to due diligence and other regulatory approvals.

The diligence period is anticipated to conclude by November 4, at which time a definitive agreement will be executed and customary regulatory approvals will be sought. BlackBerry can actively evaluate and negotiate with other parties for a better offer before recommending Fairfax offer to shareholders.

If BlackBerry publicly proposes an alternative transaction or agrees to a transaction with another party during the diligence period, a fee of $0.30 per share will have to be paid to Fairfax.

As of now, the special committee of Blackberry is seeking the best available outcome for its constituents, and determine if there are better alternatives to the present proposal from the Fairfax consortium.