Fairfax Confident Of BlackBerry Takeover As Investor Doubts Grow
Fairfax says it would not have made such a high profile bid if it was not confident
Fairfax Holdings CEO Prem Watsa has told Reuters he is confident his consortium can find the funds necessary to continue with its $4.7 billion bid to takeover BlackBerry after shares in the struggling smartphone manufacturer fell by six percent due to investor doubts about the proposal.
The Canadian hedge fund is BlackBerry’s largest shareholder with a stake of ten percent, and has agreed a preliminary agreement to acquire the company. Fairfax currently has until 4 October to complete due diligence, during which time BlackBerry can speak to other suitors.
Fairfax has bid $9 a share for BlackBerry, but shares in the firm now stand at $8.05, however Watsa said it would not have made such a high profile bid if it was not confident, claiming the drop was a typical short term fluctuation.
The consortium currently comprises Fairfax and other Canadian funds, but Watsa reportedly said others were invited to join and that although no technology companies were on board, that could change.
BlackBerry has confirmed it will not hold a second quarter earnings call scheduled for Friday in light of the agreement made with Fairfax earlier this week. The company expects to lose almost $1 billion during the period and is to lay off 4,500 staff, or 40 percent of its global workforce.
The move was seen as an attempt to attract potential buyers and it worked, with Watsa saying it believed the time was right for a bid. BlackBerry had put itself up for sale earlier this year after BlackBerry 10 smartphones failed to reverse a dramatic decline that has seen it fall from being a market leader in the enterprise to an also-ran.
BlackBerry has had a bumpy year! Try our 2013 BlackBerry quiz!