|Tycoon Watsa takes Blackberry private in US$4.7b deal
Tech pioneer BlackBerry made a last roll of the dice and agreed to a probable US$4.7 billion buyout by a consortium planning to take the struggling smartphone maker private.
BlackBerry has been squeezed by rivals Android and Apple, which coincidentally announced record sales of its latest iPhone Monday.
The Ontario-based company said it had signed a letter of intent with a group led by Fairfax Financial Holdings, which has offered to acquire the company.
Fairfax, a Canadian firm headed by billionaire Prem Watsa, is already BlackBerry's largest shareholder with about 10 percent of its shares.
Watsa resigned from BlackBerry's board in August when it announced a search for a suitor, AFP reports.
Apple meanwhile, said it sold a record nine million iPhones in three days after launching two new versions of its smartphone last week.
Under the proposed BlackBerry-Fairfax deal, the consortium would offer US$9 for each outstanding share, and Fairfax would contribute its own shares in the transaction.
BlackBerry said its board supports the plan.
A firm deal, once due diligence is completed, is expected by November 4. It also hinges on the consortium obtaining financing.
BlackBerry said it would continue a search for a possibly better suitor in the interim.
BlackBerry stock was down six percent to US$8.23 before trading was halted just prior to its announcement.
Its shares bounced back in afternoon trading to close at US$9.08 but remain far below the stock's historical high.
According to International Data Corporation, BlackBerry's global market share had slipped to 3.7 percent in the second quarter, the lowest since tracking began. Android accounts for nearly 80 percent.
The company, formerly known as Research In Motion, unveiled a new corporate name and a new platform in January as it sought to regain momentum, but its most recent numbers suggest this has been a spectacular failure.
On Friday, the company announced it was laying off 4,500 staff, or a third of its global workforce. It predicted a nearly US$1 billion second quarter loss due to poor sales of its new Z10 touchscreen smartphone.