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BlackBerry Ltd entered a tentative agreement for a $4.7-billion buyout offer from a group led by its biggest shareholder, Fairfax Financial Holdings Ltd - forging a path to go private after a new line of smartphones failed to catch on.
The Fairfax-led group would offer $9 a share, according to a statement on Monday - a 3.1 per cent premium over BlackBerry's closing price last week. The acquirers will have six weeks to scrutinise BlackBerry's books, a span in which the smartphone maker can seek other takeover offers.
The Waterloo, Ontario-based company said last week that it's cutting 4,500 jobs and taking a writedown of as much as $960 million for unsold inventory of its Z10 phone - a touch- screen device unveiled in January as its answer to the iPhone.
Chief Executive Officer 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. In recent years, the company failed to keep pace with Apple Inc and Samsung Electronics Co, which offered better Web browsing and a wider range of applications. BlackBerry's share of the global smartphone market shrank to 2.9 per cent in the second quarter from 4.9 per cent a year earlier, according to IDC. It has fallen to fourth place behind Google Inc's Android, Apple's iOS and Microsoft Corp's Windows Phone platform.
