A Canadian flag flies at BlackBerry’s headquarters in Waterloo, Ont., Tuesday, July 9, 2013. Fairfax Financial Holdings has offered to buy BlackBerry Ltd. Toronto-based Fairfax is offering US$9 cash for each share it doesn’t already own, in a deal that values BlacKBerry at about US$4.7 billion.THE CANADIAN PRESS/Geoff Robins
TORONTO – A multi-billion dollar takeover of BlackBerry by one of its largest shareholders is far from a done deal, and could still hit several snags along the way, say analysts familiar with the troubled smartphone maker.
The Waterloo, Ont.-based company announced that a consortium led by Canadian investment firm Fairfax Financial (TSX:FFH) is moving ahead with the deal worth US$4.7-billion.
But MKM Partners analyst Mike Genovese says the acquisition, valued at US$9-per-share, is a case of Canadian private equity investors trying to rescue their investment when few others are interested.
He says if Blackberry had interested buyers, Fairfax would have never had to push for this transaction, which he says was also partly done to stabilize Blackberry’s eroding stock value.
Analyst Troy Crandall of Montreal investment firm MacDougall, MacDougall and MacTier says the deal is positive for shareholders because “it relieves the uncertainty and volatility.”
The price was above BlackBerry’s recent value on public markets, following the company’s announcement Friday that it will cut about 40 per cent of its global workforce, about 4,500 jobs, and record a writedown of nearly $1 billion.
Under the deal announced Monday,