Weeks after Finnish company Nokia agreed to sell its handset business to Microsoft for $7 billion, famed Canadian device maker and enterprise solutions provider Blackberry is also following suit. Only that this time round the buyer is not Microsoft.
Prem Watsa, a former Blackberry board member and a renown Canadian billionaire is the man who will rush to Blackberry’s rescue through his holding company Fairfax Financial Holdings. Fairfax also happens to be Blackberry’s largest shareholder (that’s why Watsa was in the board) and has placed a bid of $4.7 billion that is set to go through after valuing the company’s stock at $9 per share.
Blackberry had already put itself up for sale the previous month and had hired private accounting firms to help it in its bid. On learning of the company’s move, Watsa wittingly resigned from his board position and a month later it is now revealed that he placed a convincing takeover bid. Having been valued at between $8 and $5 by most financial analysts since last Friday’s announcement that it is expecting a $1 billion loss, $9 per share doesn’t seem bad considering Blackberry’s current position. With 4,500 employees facing the axe and the company having almost given up on the consumer handset business opting to focus instead on the prosumer side of business, the Waterloo-based company is at its lowest. We can only hope that the $4.7 billion acquisition by Fairfax gives it a new lease of life.
A buyout means the company’s policies will obviously take a completely different route and the end result may be something interesting. For instance will Blackberry continue with its plans of exiting the consumer business? Now that it is busy working on bringing its most popular app, BBM, to Android and iOS, will BBM have a life of its own? Of course we can safely assume that previous rumours that Blackberry’s business will be split up and sold separately are out of the way now.
There’s this joke making rounds on the internet that Blackberry is now worth 8 million iPhones (you’re aware Apple sold 9 million iPhones in the opening weekend aren’t you?). Just do a little math. Taking the $650 price tag of the iPhone and dividing it from the price Blackberry is being sold you get something in those regions. Yeah that is the true state of affairs. Sad. See you on the other side Blackberry.