Wednesday, September 25, 2013
By Graeme MacKay, The Hamilton Spectator – Wednesday, September 25, 2013
BlackBerry takeover offer buys company time
A takeover is necessary to give battered BlackBerry the time it needs to get itself back in order, company watchers say.
On Monday, BlackBerry said a consortium led by Fairfax Financial Holdings Ltd. had signed a letter of intent to buy the company for $9 US a share in a deal valued at $4.7 billion US.
The news came just days after BlackBerry announced it would take a non-cash loss in the second quarter of $930 million to $960 million, mainly due to its large inventory of unsold devices. The company said at the time that it sold only 3.7 million smartphones in the second quarter, and was cutting 4,500 jobs.

If the Fairfax bid is succesful BlackBerry, which went public in 1997, would disappear from stock markets. But it would gain time to fix its business away from the public scrutiny that comes with quarterly results and coverage by analysts, and the media.
“Taking it private [is] the only way to save anything,” said Iain Grant of technology research and strategy firm SeaBoard Group.
“Otherwise just continue circling the drain — every quarter losses continue, confidence evaporates, no magic [equals] no value,” Grant said in an email to CBC News.
Peter Misek, managing director at investment bank Jefferies in New York City, said the letter of intent “is a bit of a relief.”
“It kind of sets the bar below BlackBerry, stabilizes the business and allows them potentially to keep going,” he told CBC’s Lang & O’Leary Exchange.
Fairfax Financial, which is led by Prem Watsa, already owns about 10 per cent of BlackBerry. Watsa served on the BlackBerry board from January 2012 until August 2013, when he stepped down citing a potential conflict of interest. (Source: CBC News)