BlackBerry on Monday announced plans to sell its business to a consortium led by Fairfax Financial Holdings Limited, which will take the troubled phone maker private in a $4.7 billion deal.
Under the deal, BlackBerry shareholders would receive $9 in cash for each share of BlackBerry they own. Fairfax currently owns 10 percent of BlackBerry's common shares, which will be contributed to the proposed transaction.
The deal was recommended by the special committee that has been considering strategic alternatives for BlackBerry, and Fairfax's "letter of intent" has been approved by the BlackBerry board of directors. Fairfax is seeking financing from Bank of America Merrill Lynch and BMO Capital Markets.
The deal is subject to due diligence, which should be done by Nov. 4, at which point a final agreement should be in place. BlackBerry is still free to consider alternative proposals during the time, though it could face fees between $0.30 and $0.50 per share if another deal is accepted, depending on the circumstances.
"The special committee is seeking the best available outcome for the company's constituents, including for shareholders," Barbara Stymiest, chair of BlackBerry's Board of Directors, said in a statement. "Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium."
Prem Watsa, chairman and CEO of Fairfax, said "this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world."
Over the weekend, there were reports that BlackBerry's former co-CEO, Mike Lazaridis, might make a bid for the company, but it appears Fairfax beat him to the punch.
The news comes several days after BlackBerry announced plans to shed 4,500 jobs, or 40 percent of its workforce, and trim its smartphone lineup.
The company faced further troubles this weekend when its rollout of BlackBerry Messenger (BBM) for iOS and Android was delayed.
Earlier this month, meanwhile, struggling PC maker Dell also decided to go private, returning control of the company to founder Michael Dell.