BlackBerry Buyout Offer Raises Array of Questions

An offer to take BlackBerry private does not end the uncertainty surrounding the ailing smartphone maker.

BlackBerry said that it had signed a letter of intent from a group led by Fairfax Financial Holdings, a Canadian insurance and investment company. The $4.7 billion offer from Fairfax, which already owns about 10 percent of BlackBerry, is a powerful symbol of the phone maker’s decline. In June 2008 — a time when BlackBerrys defined smartphones — the company had a stock market value of $83 billion. V. Prem Watsa, Fairfax’s chairman and chief executive, told shareholders in March that the company paid an average price of $17 for its BlackBerry shares, giving him an obvious interest in at least stalling the slide in BlackBerry’s shares. Yet not only are there questions about the offer, several analysts say it is not clear how the Fairfax group could stem BlackBerry’s rapid decline or stabilize the company. Given the high risk involved in investing in BlackBerry, one of the most pressing questions surrounding the deal is the identity of anyone prepared to invest in the company alongside Fairfax. Just as unclear is how a buyout would be financed. The offer establishes a timeline and a price floor for other potential bidders. But with the company in free fall, there is little certainty of another bid emerging in the coming weeks.