BlackBerry Bought Out By Consortium; Will to Go Private in a $4.7 Billion Deal, As Apple Stock Rises on new iPhone

While Apple sold 9 million new iPhones over the weekend leading to a stock surge, BlackBerrysigned a $4.7 billion deal with a consortium led by Fairfax Financial Holdings that takes it private.

BlackBerry, the troubled smartphone maker, announced plans to lay off 4,500 workers last Friday. That is about 40% of BlackBerry’s global staff. BlackBerry it had a nearly $1 billion net operating loss last quarter.

Now that BlackBerry has been bought out, it says it will would focus on its core business customers and stop marketing to consumers. BlackBerry built a strong business user following but lost its share to other device makers, including Samsung Electronics and Apple. Apple is on a run after selling more than 9 million new iPhones over the past weekend.

The consortium that proposed to buy BlackBerry out will be financed by Bank of America Merrill Lynch and BMO Capital Markets,

BlackBerry shareholders will get $9 in cash for each share they hold, onder the proposed agreement. The financial consortium would buy all the outstanding shares of BlackBerry that are not held by Fairfax in cash. Fairfax owns about 10% of BlackBerry’s common shares. Fairfax says it will contribute those into the transaction.

BlackBerry trading was halted before the announcement at 1:30 p.m. Eastern, when it was selling for $8.230 per share. When trading resumed after the BlackBerry buyout announcement, stock immediately rose to $9 per share. After the layoff announcements on Friday, BlackBerry’s stock dropped 17%. The announced net loss of about $950 million to $995 million for its fiscal second quarter of 2014, which ended Aug. 31 added to the stock drop.

Due diligence should be complete by Nov. 4, according to BlackBerry. In a statement, the chairperson of BlackBerry’s board of directors, Barbara Stymiest said, “The deal gives BlackBerry the “opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.”

In a statement, Fairfax Chairman and CEO Prem Watsa said the proposed deal would 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.”