Could it be all over for Blackberry? A mobile device that is still one of the best companions of upward mobile people in many parts of the world. How could its fortunes begin to experience a near blackout at twilight?
Last Monday, it announced, that it has reached a preliminary deal with one of its biggest shareholders, Fairfax Financial Holdings to take the company private for about $4.7 billion.
This deal also followed BlackBerry’s an embarrassing announcement, Weekend, that it had nearly $1 billion in unsold phones and would slash 40% of its workforce. Immediately after that announcement, its stock plunged from 17% to below $9, that day. Yet there were still rumours of bankrupsy hovering around the once robust outfit.
Blackberry has had slow pace of growth in recent times despite launch of Z10 and Q10 brands which were expected to have raised its market shares.
The Canadian insurance firm which it is now entering the deal with is a 10 percent shareholder in Blackberry and has already signed a letter of intent with the BlackBerry board under which it could pay $9 a share in cash for the 90% of BlackBerry shares it doesn’t already own.
However, the deal has not been totally completed because it is subject to six weeks of due diligence and Fairfax would still have to arrange financing. During this period, BlackBerry still has the right to change its mind.
The agreement also doesn’t compel Fairfax to ultimately come forward with a firm offer and technology experts said this underscores the weak negotiating position BlackBerry stands at the moment. BlackBerry, on the other hand, would have to pay a breakup fee of more than $150 million if it turns to another buyer by Nov. 4.