The deal would be completed November 4 after a due diligence period

BlackBerry has announced that it's signed a letter of intent agreement for a $4.7 billion USD sale of the company.

According to a press release, BlackBerry signed the letter agreeing to a sale of the company valued at $4.7 billion to a consortium led by its largest shareholder -- Fairfax Financial Holdings Ltd. Fairfax owns 10 percent of BlackBerry. 

This deal, which would be completed November 4 after a due diligence period, would ensure that BlackBerry goes private. Additionally, each shareholder would receive $9 per share in cash. 

Fairfax and its co-investors are seeking financing from Bank of America Merrill Lynch and BMO Capital Markets.

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

The due diligence period means that BlackBerry's Board of Directors can see if there are any better opportunities out there besides the offer from Fairfax Financial. However, if it does take another offer after signing this letter, it must pay a termination fee.

BlackBerry was once a big player in the mobile gadget realm with its popular BlackBerry smartphones and OS -- especially for the business folks. But in recent years, competitors like Apple and Samsung have stolen BlackBerry's spotlight and a significant amount of its market share in both the consumer and corporate/government markets. 

In 2011, BlackBerry had 14 percent of the U.S. smartphone market, and now, it has less than 3 percent.

This means that BlackBerry's wallet is taking a big hit. The company reported a loss of $84 million in the quarter that ended June 1, as well as a decrease of 4 million subscribers.

Last week, it was reported that BlackBerry is expecting a GAAP net operating loss of $950 to $995 million, and will cut 4,500 jobs. As of March, BlackBerry had 12,700 employees. 

BlackBerry's board of directors announced the formation of a Special Committee to explore strategic alternatives earlier this month to enhance the value and accelerate the development of BB10 -- the company's latest operating system and line of devices that launched in January. The announcement came only a few days after a report surfaced that BlackBerry might go private in an attempt to fix its problems away from the public. 

Reuters reported last week that bidders for the sale of BlackBerry want only parts of the Canadian company instead of the whole thing. More specifically, they're interested in BlackBerry's operating system and the patents for its keyboard. This further shows that BlackBerry is in such a bad spot that bidders only want to pick it for its valuable parts rather than buy the whole thing and try to fix it. 

The icing on the cake is that BB10 didn't take off and save the company the way BlackBerry expected. Both BB10 hardware releases -- the Z10 and Q10 -- have largely flopped. T-Mobile even took BlackBerry devices off of its shelves. It's releasing the high-end Z30 flagship BB10 phone soon, but many believe the results will be no different. 

Source: Market Watch

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