BlackBerry, 10 percent owned by Prem Watsa's Fairfax Financial Holdings Ltd, has been on the block since August after a few difficult years. Previously known as Research In Motion, the company was late to the game of consumer-friendly touchscreen smartphones, and it bled market share to the iPhone from Apple Inc and devices using Google Inc's Android operating system.
The offer comes from a consortium led by Fairfax that has offered $9 a share in cash to take BlackBerry private, away from constant Wall Street scrutiny. The group is seeking financing from Bank of America Merrill Lynch and BMO Capital Markets to complete the deal. "This is pretty much Plan B. They've clearly not hit the targets," said Donald Yacktman, president and founder of Yacktman Asset Management which holds a stake of less than 1 percent in BlackBerry according to Thomson Reuters data. He added he does not expect a counteroffer.
BlackBerry has until November 4 to seek superior offers, which is also the deadline for the Fairfax-led group to conduct its due diligence.
Its Nasdaq-listed shares, halted pending the afternoon announcement, rose to $9.20 as trade resumed but quickly slipped back to around $8.80 by mid-afternoon, indicating the market's lack of faith that other offers would emerge. "I would think a competing buyout offer is quite unlikely," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. "The miniscule premium, and the muted market reaction, is another indication that the market views the odds of a competing bid as slim."
A BlackBerry statement did not name the members of the consortium, although many in the financial community see Canada's deep-pocketed and influential pension funds as likely participants.
Source: Reuters
