Home News November 4th – BlackBerry D-Day

November 4th – BlackBerry D-Day



Well not quite, but it does mark the date that the due diligence period for Fairfax Financial is up. However, there is no solid rule stating that they have to conclude due diligence by this time, it’s more of a hopeful target. In the wake of this deadline drawing nearer, the swirl of rumors and news surrounding BlackBerry seems to have been non-stop. The latest comes from an article posted Friday in the Wall Street Journal. The article says that Mike Lazaridis and Doug Fregin, Co-Founders of Research In Motion, may enter a joint bid for BlackBerry alongside private equity firm Cerberus Capital Management LP and mobile-phone chip maker, Qualcomm. While the usual “people familiar with the matter” were cited in the release of this information, it is not hard to believe that this may be a likely play. Just as a reminder, Mike and Doug own about 8% of BlackBerry Stock. While this particular bit of news is interesting, it would be a whole other ballgame if this rumor materializes.

Currently, Fairfax Financial Holdings has entered into an agreement to purchase the struggling smartphone maker for $9 per share. The deal, led by BlackBerry director Prem Wasta, at it’s current $9 per share price target values the company at around 4.7 billion. However, the offer price is at a premium over the current stock price of $7.77 that BBRY closed at on Friday, which gives BlackBerry a valuation of only around 4 billion. It seems to say that investors are skeptical if a deal will be reached at $9 bucks a share and gives cause to worry that a deal may be reached at all. Prem Wasta, who already owns 10% percent of the company is said to be very serious about his offer, but if the street isn’t willing to pay $9 for the stock, it is hard to believe that he and Fairfax will want to either. I wouldn’t be surprised to see them adjust their bid to somewhere south of the previous offer.

One thing to remember is the fact that Fairfax has yet to secure funding for the 4.7 billion dollar venture. It will be interesting to see what Prem and his team come back with on Monday, if anything at all. What do you think? Are we getting a deal done with Fairfax or does it seem like something may present itself with another party? Perhaps BlackBerry will return to the control and direction of Mike Lazaridis. Time will tell.