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Biggest investor in BlackBerry deal

Analysts see $4.7b purchase as move to get access to patents

BlackBerry has announced plans to lay off 40 percent of its global workforce.

MARK BLINCH/REUTERS

BlackBerry has announced plans to lay off 40 percent of its global workforce.

TORONTO — BlackBerry’s largest shareholder has reached a tentative agreement to pay $4.7 billion for the troubled smartphone maker, even as many investors fret about its potential demise.

BlackBerry Ltd. said Monday that Fairfax Financial Holdings Ltd. has signed a letter of intent to buy the company for $9 per share in cash and take it private. The tentative deal comes just days after the Canadian company announced plans to lay off 40 percent of its global workforce. The offer price is below what the company had been trading at before the layoff announcement.

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Analysts say that although BlackBerry’s hardware business is not worth anything, the company still owns valuable patents. Patents on wireless technologies have exploded in value in recent years, as makers of the iPhone and various Android devices sue each other. Having a strong portfolio of patents allows phone makers to defend themselves and work out deals.

BlackBerry is also strong in having total cash and investments of about $2.6 billion, with no debt.

The BlackBerry deal follows a $7.2 billion offer that Microsoft Corp. made this month for the phones and services business of another troubled phone maker, Nokia Corp. Last year, Google Inc. paid $12.4 billion for another fallen pioneer, Motorola Mobility, mostly for its patents.

The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers. Use of it could be so addictive that it was nicknamed ‘‘the CrackBerry.’’ President Obama couldn’t bear to part with his BlackBerry. Oprah Winfrey declared it one of her ‘‘favorite things.’’

But then came a new generation of competing smartphones, starting with Apple’s iPhone in 2007. The BlackBerry, that game-changing breakthrough in connectedness, looked ancient suddenly.

Although BlackBerry was once Canada’s most valuable company with a market value of $83 billion in June 2008, the stock has plummeted from more than $140 a share to less than $9, giving it a market value of $4.6 billion, just short of Fairfax’s offer. BlackBerry shares plunged 17 percent Friday after the company announced a loss of nearly $1 billion and layoffs of 4,500 workers. It gained 9 cents, or 1.1 percent, to $8.82 Monday.

Fairfax head Prem Watsa, who owns 10 percent of BlackBerry, stepped down as a board member because of potential conflicts when BlackBerry announced it was considering a sale last month.

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