BlackBerry to be acquired by Prem Watsa-led Fairfax group

Hyderabad-born Prem Watsa is the founder, chairman, and CEO of Fairfax Financial Holdings, based in Toronto. Often called the “Canadian Warren Buffett” he is an alumnus of the Hyderabad Public School, Begumpet and a graduate of the Indian Institute of Technology with a degree in Chemical Engineering.

The letter of intent contemplates a transaction in which BlackBerry shareholders would receive $9 in cash for each share of BlackBerry they hold, in a transaction valued at approximately $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, 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 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. The agreement is on a non-exclusive basis. If 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 $0.30 per BlackBerry share, provided, however, that no such fee shall be payable if the consortium shall have reduced the price offered below $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 $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.”

Microsoft will Buy Nokia's Devices and Services Business

Microsoft will buy Nokia's devices and services business and license Nokia's patents and mapping services in a deal the companies valued at $5.44 billion euros, or about $7.2 billion, the companies announced late Monday.

Shannon Stapleton / Reuters file

Nokia CEO Stephen Elop unveils Nokia's Lumia 1020 smartphone July 11, 2013, in New York. Elop will join Microsoft once the deal between the two companies is completed.

Nokia CEO Stephen Elop, who was hired away from Microsoft by the Finnish company in 2010, will rejoin Microsoft after the deal is completed, the companies said, perhaps putting him in position to succeed Microsoft CEO Steve Ballmer, who has announced he plans to retire.

In a joint news release from the two companies, Ballmer said the deal will bring Nokia's capabilities in hardware design, engineering, manufacturing, sales, marketing and distribution to Microsoft.

"For Microsoft, this transaction is the key next step in furthering the company's transition to a devices and services company," the statement said.

When the deal closes, expected to be in early 2014, about 32,000 Nokia employees will transfer to Microsoft. Nokia Chairman Risto Siilasmaa will take over CEO duties while the Espoo, Finland-based company looks for a new CEO.

Ballmer surprised the technology world Aug. 23 by announcing he would step down as CEO of Redmond, Wash.-based Microsoft within 12 months, ending a tenure marked by the software giant's declining dominance and struggles to keep pace with its competitors.

Microsoft said then that Ballmer would retire "upon the completion of a process to choose his successor. In the meantime, Ballmer will continue as CEO and will lead Microsoft through the next steps of its transformation to a devices and services company."