BlackBerry 'Agrees' To $4.7bn Sale To Fairfax

Troubled smartphone maker BlackBerry has agreed in principle to a buyout by its largest shareholder for $4.7bn (£2.93bn).

The company said it had "signed a letter of intent agreement under which a consortium to be led by Fairfax Financial Holdings Limited has offered to acquire the company subject to due diligence".

Fairfax boss Prem Watsa is a former board member who owns 10% of BlackBerry.

BlackBerry last week confirmed plans to cut 40% of its global workforce as it said it expected to report massive losses of almost $1bn (£620m) in its second quarter.

The smartphone company said it would lay off 4,500 employees in an attempt to slash costs by 50% and shift its focus back to competing mainly for the business customers who are most loyal to the brand.

Blackberry's all-touchscreen Z10 has not matched the sales of its rivals

Mr Watsa said: "We believe 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."

Shareholders will receive $9 (£5.60) in cash for each share.

The agreement with Fairfax allows BlackBerry to "go shop" for better offers for the firm should they become available during the due diligence process, which is expected to take until November 4.

BlackBerry's market share has dwindled in recent years, with Android devices from the likes of Samsung, and Apple's iPhone gobbling up increasing numbers of customers.

BlackBerry and its physical qwerty keyboard once dominated the market

It now holds just 2.9% of the market, according to research firm IDC, compared with 20% in Autumn 2009 when it was the dominant smartphone for business people.

BlackBerry, formerly known as RIM, was also once Canada's most valuable company, with a market value of $83bn (£52bn) in June 2008.

The firm was hoping to turn things around with a fresh operating system and two new devices - the Z10 and Q10.

However, the phones, which were launched earlier this year, have failed to capture the public's imagination in the same way as rival handsets.

BlackBerry revealed in August that it would consider selling itself, and chief executive Thorsten Heins reiterated last week that a committee of its board of directors was continuing to "evaluate all options".

The company also said it planned to focus on offering only two high-end devices and two entry-level handsets going forward.

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