Smartphone maker BlackBerry Ltd announced on Monday it was accepting an initial offer from its biggest shareholder, Indian-born Prem Watsa, to take it private in a $4.7-billion deal.
A consortium led by Watsa's Fairfax Financial has made an offer of $9 a share, from which it can walk away if the deal doesn't look during six weeks of due diligence.
And BlackBerry can shop around for better offers. It has been trying to hawk itself after the failure of its new model Z10 to reverse its plummeting marketshare.
The company announced last Friday it had $1 billion worth of unsold phones and that it was slashing workforce by 40%. The Fairfax offer gives it a base price to build on.
"We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees," Watsa said in a statement released by BlackBerry.
In an interview to Wall Street Journal, Watsa said he believed the company can be turned around, away from public glare. "We think in a private setting this company can do well, without all the noise from the marketplace," he said.
Speculation about Watsa's plans to buy BlackBerry started when he stepped down from the Ontario-based company's board in August citing possible conflict of interest.
He has not yet disclosed the composition of the consortium he is leading, saying only Canadian pension funds will be involved likely.
BlackBerry co-founder and former co-CEO Mike Lazardis is also reported to be considering a separate offer. He has discussed a joint bid with Watsa, said the Journal. Lazardis's stake in the company said to be around 5.7%.
BlackBerry said the general terms of the deal have been approved by its board and a special committee set up to review options to reach a transaction agreement by November 4. Till then it can shop around for other buyers. But if BlackBerry backs out of the deal, it would owe Fairfax about $157 million.
BlackBerry may have lost the smartphone war but its patents, secure mail network and cash pile of $2.6 billion, still make it look an attractive buy.
(with agency inputs)