BlackBerry said Monday that a letter of intent has been signed and its shareholders will receive $9 in cash for each share.
Fairfax head Prem Watsa is a former board member who owns 10 percent of BlackBerry. Watsa stepped down when BlackBerry announced it was considering a sale last month. The billionaire is one of Canada’s best-known value investors. .
Trading of the company’s stock was halted ahead of the news. BlackBerry shares plunged after the company announced Friday a loss of nearly $1 billion and layoffs of 4,500 workers.
The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers before Apple’s iPhone debuted in 2007.
BlackBerry agreed in principal Monday to be acquired by Fairfax Financial, a Canadian insurance company, for $9 a share in a deal worth $4.7 billion in US dollars.
Trading in BlackBerry (Toronto Stock Exchange: BB-CA) was halted before the announcement. When it resumed at 2 p.m. EDT, the stock jumped as much as 5 percent before retreating slightly. Prior to the announcement shares in the troubled smartphone maker company were down more than 5 percent.
Fairfax Financial, sometimes called the Berkshire Hathaway of Canada, is a holding company whose primary business is in insurance. Fairfax is also BlackBerry’s largest shareholder.
It is led by Prem Watsa, a chemical engineer by training who has run the firm since the mid-1980s.
The press-shy Watsa has long been a supporter of BlackBerry, and his name has been linked with a potential buyout for months.