While we don't believe in paying too much attention to buyout rumors and speculating on potential takeover targets, Fools should definitely try to keep up with M&A news that is officially announced -- just in case it's material to our investing thesis.
What: Embattled smartphone maker BlackBerry (NYSE:BB) said on Monday that it has signed a deal to be bought by a consortium led by 10% owner Fairfax Financial, in a deal valued at $4.7 billion.
So what: It's no secret that BlackBerry has struggled to remain relevant in recent years, but the move to become private may help management restructure without worrying that failed moves will drag down its share price. Of course, without access to public capital markets, reclaiming market share from cash-spewing 800-pound gorillas like Apple and Google might prove to be too tall an order.
Now what: BlackBerry and Fairfax agreed to complete due diligence by Nov. 4, with BlackBerry permitted to enter into talks with other potential acquirers. "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," Fairfax CEO Prem Watsa said in a statement. So while BlackBerry may now solicit competing bids for a six-week "go-shop" period, holding out for a dramatically better offer doesn't seem prudent given the company's flimsy bargaining position.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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