BlackBerry bid will be financed, Fairfax's Watsa says

After the struggling smartphone maker threw in the towel and announced its plans to go private, the man behind the buyout proposal, Prem Watsa, says he's confident the deal will succeed.

BlackBerry's Z10 smartphone. Josh Miller/CNET

The man behind the consortium offering to buy out BlackBerry and take it private offered some insight into the deal on Wednesday.

Fairfax Financial Holdings CEO Prem Watsa told Reuters that he believes the consortium will be able to come up with the money needed to pay for the $4.7 billion bid.

"We wouldn't put our name to such a high-profile deal if we didn't feel confident that at the end of the day that our due diligence would be fine and we'd be able to finance it," Watsa told Reuters.

BlackBerry announced Monday that it had entered into talks with the consortium, which is led by Fairfax Financial. Under the proposed deal, shareholders would receive $9 a share in cash, a slight premium to the roughly $8 that the stock is currently trading at.

It's unclear what BlackBerry's investors think about the possible buyout. The company's shares closed $1 below the $9 per share bid price on Wednesday, which could mean that investors are wary, according to Reuters. But Watsa didn't seem deterred by these numbers.

"Short term these things fluctuate -- there is speculation one way, there's speculation the other way," Watsa told Reuters. "We never pay too much attention to the marketplace."

Watsa has a track record for making smart business deals that have given him a name in the financial world . He has been the Fairfax boss since 1985, and despite a couple of lackluster years recently, Fairfax's sales and earnings have been climbing, while the company's stock price has compounded at 19 percent annually since he took over.

Fairfax is BlackBerry's biggest shareholder and intends to contribute its 10 percent stake in BlackBerry to the consortium . The consortium has until November 4 to complete its due diligence of the company's financial shape. During that period, BlackBerry has a right to entertain other offers.

Tags:
Mobile
Phones
About the author

Dara Kerr, a freelance journalist based in the Bay Area, is fascinated by robots, supercomputers and Internet memes. When not writing about technology and modernity, she likes to travel to far-off countries.

 

Join the discussion

Conversation powered by Livefyre

Don't Miss
Hot Products
Trending on CNET

HOT ON CNET

Love heavy and clunky tablets?

Said no one ever. CNET brings you the lightest and thinnest tablets on the market.