BlackBerry fetches nearly $5 billion

(MoneyWatch) BlackBerry is being sold -- whole. Fairfax Financial, a Canadian investment firm, has made a bid of $4.7 billion. The deal is contingent on Fairfax getting financing and performing due diligence.

If the deal does go through, it would conclude BlackBerry's chapter of life as a public company, and would punctuate its steady decline from its onetime perch at the top of the smartphone market. At least for now, the deal would be for the whole of the company: Much speculation had centered on BlackBerry being broken into parts and sold piecemeal.

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The deal would pay BlackBerry (BBRY) shareholders $9 a share. Earlier Monday, before its shares were halted pending news of the deal, the company was trading for $8.23 a share, down 49 cents, or a loss of 5.6 percent. At $9, the company is still below where it was trading as late as Friday, when the company announced another epic loss and the layoffs of thousands of employees and a complete withdrawal from the consumer market.

"Blackberry was ripe for a takeover by an investment firm, because of the enormous amount of market share it's lost," said Kevin Restivo, an analyst at International Data Corp. "It wasn't totally unexpected -- Fairfax likes to take over distressed assets and try to rebuild them."

The question now is whether the investment firm will try to sell its various parts.

"It's been a tightly knit fabric, predicated on the BlackBerry enterprise center, with its own network, its own devices, its own server software," Restivo said. "That combination isn't working anymore. So it's possible they could break themselves up, selling the handset division, for example. At its simplest, it's difficult for BlackBerry to remain as is."

For now, the hopeful acquirers are not suggesting they'll chop up the company.

"We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees," said Prem Watsa, chairman and CEO of Fairfax in a statement. "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."

Meanwhile, investors seemed unconvinced that deal would be completed. Although Blackberry shares surged past $9 when trading resumed at 2:00 pm EDT, by 3:15 p.m. they had drifted back down to $8.80. A stock that trades above a takeout price suggests investors are expecting a bidding war; a company trading below the offer means people think the deal is likely to fall apart. 

"Hooray they found somebody," said Ramon Llamas, a fellow analyst of Restivo's at IDC. "But the comments about keeping it whole are worrisome. There's nothing about strategy. It's still just an announcement. That's all it is."