The struggling Canadian Company BlackBerry finally announced yesterday, that it has finally agreed to a buyout worth $4.7 billion by a consortium of investors being led by Fairfax Financial Holdings Limited. Blackberry told that they signed a letter with the Consortium offering to acquire the company subject to due diligence.
The BlackBerry News
Fairfax is a Canadian firm which is being headed by a billionaire Prem Watsa. Prem Watsa is surprisingly the largest shareholder of Blackberry with an estimate of holding almost 10 percent of total shares. Watsa though resigned from BlackBerry’s board when he announced in August that he was in search for a Suitor/buyer .
The Canadian Smartphone company’s Stock price was down by 6 percent making it $8.23 per share. However Consortium would be offering 9$ per share in which Fairfax share would also be contributed in the transaction. This plan was also welcomed by the Blackberry board of directors.
The deal is expected to take place and announced somewhere in November. Until this time the diligence would be completed and Consortium can also obtain financial assistance in the meantime. However Blackberry said that they would be continue the search to find a better suitor in this time.
We were also expecting this to happen as recently the canadian handset maker failed to create a buzz in the market with their handsets. Even the company flagship model Blackberry Z10 didn’t do well. However the smartphone was being termed to be an iPhone competitor but the main reason for its failure according to me was the hefty price tag it was attached with.
Since everyone was getting great options in the android OS with a smartphone for all possible range, it was easy for the consumers to move away from canadian handset maker Blackberry. Talking about the iPhone, though it was being termed as a competitor for iPhone but if a consumer has to pay the same amount for that smartphone also, it would be very hard for him to choose the Blackberry rather than iPhone. In a way they themselves made the deal difficult.
It is yet to be seen where the consortium would be leading this to, once the deal is finalized.