TORONTO – BlackBerry’s largest shareholder has reached a tentative agreement to pay $4.7 billion for the troubled smartphone maker, even as many investors fret about its potential demise.
BlackBerry Ltd. said Monday that Fairfax Financial Holdings Ltd. has signed a letter of intent that contemplates buying the company for $9 per share in cash in a deal that would take the company private.
The tentative deal comes just days after the Canadian company announced plans to lay off 40 percent of its global workforce. The offer price is below what BlackBerry was trading at before the layoff announcement.
Analysts say that although BlackBerry’s hardware business is not worth anything, the company still owns valuable patents.
BlackBerry is also strong in having total cash and investments of about $2.6 billion, with no debt, though it’s burning through that stockpile. In just the past few months, it’s spent about half a billion dollars.
The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers. It could be so addictive that it was nicknamed the CrackBerry.
BlackBerry shares plunged 17 percent Friday after the company announced a quarterly loss of nearly $1 billion and layoffs of 4,500 workers.
It gained 9 cents, or 1.1 percent, to $8.82 Monday.