Another mobile company has inked a deal to sell itself, following Nokia’s move to sell its mobile phone business to Microsoft for US$7.1 billion.
BlackBerry officially announced on Tuesday that it had agreed to sell to finance holding firm Fairfax Financial Holdings Limited for US$4.7 billion. Shareholders of the beleaguered smartphone maker will get US$9 for every share that they own.
Based in Toronto, Fairfax refers to itself as “a financial services holding company whose corporate objective is to achieve a high rate of return on invested capital and build long-term shareholder value.”
While it is primarily engaged in the insurance business, Fairfax also has a few connections to the mobile industry.
The two companies have already signed a letter of intent, with the final deal subject to various conditions, which include negotiation, due diligence and the execution of a definitive agreement as well as customary regulatory approvals.
BlackBerry has been given a six-week period within which to conduct due diligence. Although the smartphone maker can find a new buyer during this period, it will have to pay Fairfax a termination fee if it decides to ditch it in favour of another buyer.
Barbara Stymiest, BlackBerry Board Chairwoman, revealed that the firm’s Special Committee is looking for the best possible outcome for its constituents and shareholders. She highlighted that the go-shop process offers the firm a chance to determine if there are better alternatives than that offered by the Fairfax consortium.
To complete the transaction, Fairfax, which already holds a ten percent stake in BlackBerry, is seeking funding from Merrill Lynch, Bank of America and BMO Capital Markets.