Fairfax-Led Consortium to Buy BlackBerry (BBRY) in $4.7 Billion Deal

NEW YORK (TheStreet) -- Beleaguered smartphone manufacturer BlackBerry  (BBRY) has signed a letter of intent with a Fairfax Financial Holdings-led consortium, pending a period of six weeks' due diligence. Fairfax already owns around 10% of BlackBerry common shares and will put forth $4.7 billion, or $9 per share, to take the company private.

The six-week period of due diligence, ending November 4, will allow BlackBerry to solicit more attractive offers compared to the Fairfax bid.

"The go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium," said Chair of BlackBerry's Board of Directors Barbara Stymiest in a company press release.

BlackBerry trading was halted for the second day in a row during the announcement of the deal, resuming at 2 p.m. EST. By day's end, BlackBerry was 1.09% higher to $8.82 and 109.21 million shares changed hands compared to its average daily volume of 31 million. Overall, BlackBerry led the S&P 500 which was down 0.47%.

"We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carrier and employees," said Prem Watsa, Fairfax Chairman and CEO. "We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy ... delivering superior and secure enterprise solutions."

BlackBerry share value plummeted 20% on Friday after the company reported less-than-favorable second-quarter figures. For the quarter ended August 30, BlackBerry downgraded its revenue guidance to $1.6 billion, significantly lower than the expected $3.06 billion. The company sold only 3.7 million of its phones during the quarter and had to write-down $1 billion of unsold inventory.

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