BlackBerry worth 20% of book value

By Marc Castro

Sep 25, 2013 06:29 AM EDT

Once valued at USD83 billion, the Canadian smartphone maker Blackberry Ltd had declined to record the lowest ever valuation for a technology or telecommunications takeover for a North American firm. This comes after BlackBerry entered into a tentative agreement for a USD4.7 billion buyout with Fairfax Financial Holdings.

Fairfax is BlackBerry's largest shareholder and in the valuation, when net cash is included, the smartphone firm's worth is 20% of its book value with sale of just 0.17 times its sales. This 80% discount is the lowest ever valuation and revenue multiple recorded for similarly situated North American telecommunications or technology acquisitions. This conclusion was based on data obtained by Bloomberg.

Fairfax owns about 10% of the common stock in the Waterloo, Ontario based company. As for the takeover consortium, there was no mention of others included in the bid. During an interview, Fairfax CEO Prem Watsa confirmed that former co-CEO and founder of Blackberry Mike Lazaridis was not a member fo the consortium. Lazaridis, who owns a 5.7 stake in BlackBerry, chose another path for the future of the company.

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