MercoPress. South Atlantic News Agency

Struggling Blackberry agrees in principle sale for 4.7bn dollars

On Friday, Blackberry announced 4,500 jobs cuts in a bid to stem losses

Struggling smart-phone maker Blackberry has agreed in principle to be bought by a consortium led by Fairfax Financial for 4.7bn dollars. Blackberry said in a statement that Fairfax, its largest shareholder with about 10% of the stock, had offered 9 dollars a share in cash to buy the company.

But Blackberry said it would continue to explore other options while negotiations with Fairfax continued. On Friday, Blackberry announced 4,500 jobs cuts in a bid to stem losses.

The Canadian company said it expected to make a loss of up to 1bn dollars after poor sales of its new handsets. In August, Blackberry said it was evaluating a possible sale.

On Monday, the company announced that 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”.

The statement continued: “Diligence is expected to be complete by November 4, 2013. The parties' intention is to negotiate and execute a definitive transaction agreement by such date.”

However, Blackberry said it was not in exclusive talks with Fairfax and would continue to “actively solicit, receive, evaluate and potentially enter into negotiations” with other potential buyers.

Canadian billionaire Prem Watsa, Fairfax's chairman and chief executive, 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.”

Blackberry's financial problems came to a head this year following disappointing sales of its new Z10 model smart-phone. Released in January - after many delays - the phone has failed to attract consumers.

Blackberry shares, which fell 17% on Friday after its jobs cut announcement, rose just over 1% on Monday.