BlackBerry has accepted an offer from a consortium led by Canadian insurance company Fairfax Financial for $9 a share, or $4.7 billion. Blackberry can still entertain offers from other buyers during a due diligence period until Nov. 4, but it would have to pay as much as 50 cents a share in fees, or $262 million, if it backs out of a done deal with Fairfax.
For the second consecutive trading day, BlackBerry shares were halted as the company geared up to make a big announcement. Monday’s acquisition news comes on the heels of Friday’s report that revenue is expected to decline to $1.6 billion for the second quarter. Falling short of analyst estimates of $3.04 billion, the company said it plans to slash its workforce by 40%, or 4,500 jobs, as it shifts its focus to the enterprise and prosumer markets.
Before BlackBerry signed a letter of intent agreement, Fairfax had owned about 10% of the company’s common shares. In August, the ailing smartphone maker formed a special committee to explore a potential sale, an admission it was failing to keep up with Apple and Google in the mobile landscape. In a press release, BlackBerry’s board of directors said it was acting on the recommendation of this committee and approved the terms to take the company private.
When BlackBerry shares resumed trading at 2 p.m. ET, they immediately jumped almost a percent from $8.24 to $9. The stock closed at $8.82, up 1.1%.