WATERLOO, Canada – BlackBerry announced Monday it reached a preliminary deal with one of its biggest shareholders to try to take the company private for about $4.7 billion, which could let the struggling mobile device maker find a suitor.
Fairfax Financial Holdings, a Canadian insurance firm, signed a letter of intent with the BlackBerry board where it could pay $9 a share in cash for the BlackBerry shares not already held by Fairfax. The company already owns about 10 percent of BlackBerry’s shares.
The deal is far from complete?it is subject to six weeks of due diligence until Nov. 4, and BlackBerry is entitled to shop the company during this period. The Fairfax group still needs to raise financing for its potential deal, The Wall Street Journal reported.
There are other parties still considering making a bid for BlackBerry, though it was unclear how the Fairfax news would affect their deliberations, one person familiar with the deal told the Journal.
The Canadian company said its board has approved the proposed transaction. If BlackBerry backs out of the potential Fairfax deal or finds another buyer, it would owe Fairfax a fee of 30 cents a share, or about $157 million. That fee would increase to about $262 million if a definitive agreement is signed and BlackBerry walks away.
