RIM CEO Thorsten Heins kicked off the three-day BlackBerry Jam in September of 2012 with a look at the new BlackBerry 10 opereating system. (Photo by Justin Sullivan/Getty Images)
By Alistair Barr and Scott Martin, USA TODAY
BlackBerry said Monday that it is working on a $4.7 billion deal to be acquired by a group of investors led by Prem Watsa, who is sometimes known as Canada's Warren Buffett.
The deal, which is subject to due diligence, further negotiation and regulatory approval, would pay BlackBerry shareholders $9 per share in cash for a total value of about $4.7 billion, the company added.
BlackBerry shares jumped 3% to $8.97 and briefly traded above the $9 offer price in afternoon action.
BlackBerry has lost about 95% of its market value in recent years as the Canadian company fell behind Apple and Google's Android in the fast-growing smartphone market.
Watsa, who has an impressive track record as a value investor, plans to take BlackBerry private and re-focus the company on services for companies and other enterprises.
Watsa already owns about 10% of BlackBerry shares through the Fairfax insurance business he oversees. That stake will be contributed to the planned $4.7 billion deal.
"Being private would mean that Wall Street is not continuously breathing down their neck," said analyst Jack Gold of research firm J. Gold Associates. "Can BlackBerry ultimately survive? That's not as clear. But given 6-12 months of 'under the cover' ability to do what is needed, it could be a much more attractive acquisition target at the very least."
The investor group said it plans to complete due diligence and strike a definitive deal by Nov. 4. Between now and then, BlackBerry is allowed to pursue other possible deals. However, if an alternative deal is reached, BlackBerry has to pay Fairfax a termination fee of at least 30 cents per share, the company said.