After various failed attempts to make a comeback, Blackberry finally decided to go private. A consortium (group of investors) led by Fairfax Finacial, which is also the biggest shareholder in Blackberry, has decided to acquire all the shares in order to make it a private company.
Fairfax is a candian property and casualty insurance company headed by India born Mr Prem Watsa. Mr Watsa was also a member of the board in Blackberry but stepped down in August this year.
Blackberry acquisition Deal terms
Fairfox has offered a tentative valuation of $ 9 a share, a litte premium over the closing share price of $ 8.82 before the trading halted due to announcement.
Considering an 524.16M outstanding shares, the equity value of company totals to be $ 4.72 billion. This is not bad for other shareholders considering the “struggling for survival” status for the company. Not to forget, the company recently announced an expected loss of approximately $ 1 billion in the second quarter due to poor sales of Blackberry Z10.
Rise and fall of Blackberry
Blackberry shares were trading for $ 148 in June 2008 which was the time company was on its peak. First to offer email on the go with real time alert, the brand soon became a top choice for professionals and even government officials.
But like Nokia, the company also became non-innovative after the first wave of success. Other companies like Apple and Samsung came up with better handsets with smarter operating systems, offering real time email synchronization without any server charges and started taking over the market. By the time, Blackberry realised and came up with its own touch enabled handsets, it was too late. Plus the company priced its devices too higher returning not so great value for money in comparison to competitors.
Though company made various attempts to make a comeback, but all in vain. Recently launched smartphones powered by latest Blackberry OS 10 were also not able to do any magic for the company.
Another attempt to save the sinking ship was to launch its much popular BBM app for other platforms like Android and iOS. This was scheduled to be launched on 21 Sep, but the launch was delayed citing app not yet ready. Now its safe to assume that the rollout was postponed keeping the announcement in view.
Its still not clear whether the company after acquisition would continue selling consumer products or focus on the enterprise based solutions only.