Update: Deal in place for BlackBerry to be sold for $4.7B
Update: Apparently I was wrong about BlackBerry being a company only its founder could love. BlackBerry just announced it signed a letter of intent with a consortium led by Fairfax Financial Holdings Limited for $9/share. Trading of the smartphone maker was halted at $8.24 and will resume at 2:00pm. Fairfax currently owns about 10% of BlackBerry's common shares. Due Diligence is expected to be complete by November 4, 2013 and the breakup price is between $.30/share and $.50/share.
During the due diligence period Fairfax will find a company that isn't profitable and has a dejected workforce. I previously called the company "Toxic" and am not backing off from that assessment. I'm not understanding why Fairfax would make this deal, even for such a low price. It certainly looks like current BlackBerry shareholders are getting great value here.
BlackBerry co-founder is considering buying the company:
In a move that is reminiscent of Michael Dell’s recent success at purchasing the company he founded, BlackBerry co-founder Mike Lazaridis is considering partnering with private-equity firms Blackstone and Carlyl to purchase the company. Lazaridis was the company’s CEO until last year and still owns a significant part of the company. The troubled company launched a new phone last week, but things are not going well. (See the post from last week here for details.) BlackBerry announced its disastrous earnings last Friday and that it is cutting 4,500 jobs reducing its workforce by 40%. It also announced an operating loss of over $1B and that it missed revenue by 50%. BlackBerry is ripe for a sale with its share price down to $8.54 after shares were as high as $18 in the early part of 2013, but with all the turmoil right now it seems to be a company that only its founder could love.