BlackBerry Signs LOI with Fairfax Financial Holdings Limited

Yesterday, Blackberry announced it had signed an LOI with a group led by Fairfax Financial, an insurance investment company from Toronto, Canada. Under the terms of the LOI, BlackBerry shareholders would get $9 a share in cash, making the deal worth about $4.7 billion. On Friday, BlackBerry reported $950 million and $995 million in operation losses and announced plans to cut 4,500 jobs.

I have very low hopes for this being a successful transaction for BlackBerry – Fairfax Financial Holdings is an investor, not an operator.  Furthermore most of its investments are in the insurance market.  What FFH did by putting an offer on the table is “call the question” rather than let the fate of BlackBerry languish in the marketplace and media speculation. Brilliant move. The only synergy in this deal is they are both headquartered in Toronto, Canada.

What BlackBerry really needs is a strategic owner – such as a hardware company like Dell or a software company like Microsoft or Google who could benefit from a loyal fan base with an established device. Microsoft just purchased Nokia’s phone business in order to accelerate its growth in mobile devices. A similar partnership would benefit BlackBerry.

Perhaps BlackBerry could be acquired by an unlikely candidate such as Yahoo! who just spent the past year buying over a dozen mobile technology companies and could effectively deploy those engineers to really create a unique product offering.

*Full disclosure – I just switched to an iPhone this past Friday, after being a loyal BlackBerry user for many years.

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