BlackBerry Limited
BBRYBB today announced it has signed a letter of
intent agreement ("LOI") under which a consortium to be led by
Fairfax Financial Holdings Limited ("Fairfax") has offered to acquire
the company subject to due diligence.
The letter of intent contemplates a transaction in which BlackBerry
shareholders would receive U.S. $9 in cash for each share of
BlackBerry share they hold, in a transaction valued at approximately
U.S. $4.7 billion. The consortium would acquire for cash all of the
outstanding shares of BlackBerry not held by Fairfax. Fairfax, which
owns approximately 10 percent of BlackBerry's common shares, intends
to contribute the shares of BlackBerry it currently holds into the
transaction.
The BlackBerry Board of Directors, acting on the recommendation of a
special committee of the board of directors (the "Special
Committee"), approved the terms of the LOI under which the
consortium, which is seeking financing from BofA Merrill Lynch and
BMO Capital Markets, would acquire BlackBerry and take the company
private subject to a number of conditions, including due diligence,
negotiation and execution of a definitive agreement (the "Definitive
Agreement") and customary regulatory approvals.
The Special Committee, chaired by Director Tim Dattels, was formed in
August 2013 to review strategic alternatives for the company. J.P.
Morgan and Perella Weinberg are acting as financial advisors and
Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP are acting as
legal advisors.
Diligence is expected to be complete by November 4, 2013 ("Diligence
Period"). The parties' intention is to negotiate and execute a
definitive transaction agreement by such date. During such period,
BlackBerry is permitted to actively solicit, receive, evaluate and
potentially enter into negotiations with parties that offer
alternative proposals ("Alternative Transactions").
If (A) during the Diligence Period (i) BlackBerry enters into any
letter of intent or definitive agreement providing for an Alternative
Transaction, (ii) BlackBerry ceases to negotiate with the consortium
in good faith with a view to entering into the Definitive Agreement
by the end of the Diligence Period, or (iii) an Alternative
Transaction is publicly proposed or publicly announced and is
consummated within 6 months following the end of the Diligence
Period, or (B) during the 3 month period following the end of the
Diligence Period, BlackBerry enters into any agreement providing for
an Alternative Transaction with a person with whom discussions were
held before or during the Diligence Period, then BlackBerry shall pay
Fairfax a fee of U.S. $0.30 per BlackBerry share, provided, however,
that no such fee shall be payable if the consortium shall have
reduced the price offered below U.S. $9.00 per share without the
approval of the board of directors of BlackBerry. In the event that a
definitive agreement is signed with Fairfax the termination fee will
increase to U.S. $ 0.50 per share.
Barbara Stymiest, Chair of BlackBerry's Board of Directors, said:
"The Special Committee is seeking the best available outcome for the
Company's constituents, including for shareholders. 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: "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 with a focus on delivering superior and
secure enterprise solutions to BlackBerry customers around the
world."
In addition to the consortium and its lenders being satisfied with
all aspects of the due diligence to be carried out by them during the
Diligence Period and the negotiation and execution of a binding
definitive agreement approved by the board of BlackBerry, completion
of the transaction will be subject to other customary conditions,
including receipt of required regulatory approvals. There can be no
assurance that due diligence will be satisfactory, that financing
will be obtained, that a definitive agreement will be entered into or
that the transaction will be consummated.
BDT & Company, LLC, BofA Merrill Lynch and BMO Capital Markets are
acting as financial advisors, and Shearman & Sterling LLP and
McCarthy Tetrault LLP are acting as legal advisors to Fairfax in
connection with the transaction.
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