BlackBerry agreed in principle Monday to be acquired by Fairfax Financial, a Canadian insurance company, for $9 a share in a deal worth $4.7 billion in US dollars.
Fairfax Financial, sometimes called the Berkshire Hathaway of Canada, is a holding company whose primary business is in insurance. It is also BlackBerry's largest shareholder, owning about 10 percent of the company's common shares.
BlackBerry now enters a shop period for about six weeks where it can solicit, receive and enter into negotiations with other interested parties. If another buyer offers more than $9 a share during the shop period, then Fairfax would receive an incentive fee of about $157 million for attracting interest in the company. More details are expected on November 4, when the "diligence period" ends.
It should also be noted that Fairfax is still trying to raise the financing for the deal from BofA Merrill Lynch and BMO Capital Markets and is not obligated to follow through on an actual definitive agreement.
"At least they have one bid on the table. It would be an excellent thing for Blackberry to be able to go private, out of the public eye and to try and reshape itself and see if they can go forward market as an enterprise focused company," said Colin Gillis, an analyst at BGC Partners, on CNBC's Squawk on the Street, on Monday.
Trading in BlackBerry was halted before the announcement. When it resumed at 2 p.m. EDT, the stock jumped as much as 5 percent before retreating slightly. Prior to the announcement shares in the troubled smartphone maker company were down more than 5 percent.
News of BlackBerry's buyout offer comes just after the company announced on Friday a massive restructuring, which includes slashing 4,500 jobs, and a revised forecast for its second-quarter earnings.
(Read more: BlackBerry to slash 4,500 jobs in restructuring )
The company said it expects a second-quarter loss excluding items of 47 cents to 51 cents per share, which is more than the 27-cent loss per share in the same quarter last year. It also expects revenue to decline to $2.6 billion from $3.1 billion a year ago.