Dallas, Texas 09/27/2013 (Financialstrend) – A letter of intent to be obtained by a group led by Fairfax Financial Holdings Ltd was signed by BlackBerry Ltd (NASDAQ:BBRY) on Wednesday. The company has been given an offer of $4.7 billion cash or $9 per share and this deal is anticipated to be accomplished by November 4.
To back its plan of spending a huge amount of $4.7 billion to acquire BlackBerry, Fairfax Financial is looking for more than $1 billion in equity investments from the institutional investors. Chief Executive Officer of BlackBerry Ltd, Prem Watsa personally contacted many leading U.S and Canadian private and pension-equity funds to win their support for the bid he made to buy the fraught smartphone maker.
But according to Canadian newspaper, The Globe and Mail, in spite of the contacts made by Mr. Watsa to different equity funds, only one pension fund, the Ontario’s Teachers’ Pension Plan was seriously interested in joining the takeover conglomerate. According to Mr. Watsa, acquiring BlackBerry is a leverage buyout and will be financed with $3 billion in bank loans and $1 billion in equity and Fairfax has a total of 10% stake in BlackBerry Ltd. However, if the equity fails to help finance this takeover, Fairfax is intending to arrange a short span bridge loan that can be easily repaid with the cash holding of BlackBerry worth $2.6 billion.
If this bid succeeds, then BlackBerry can finally have some breathing room but it is not going to solve all its problems.
About BlackBerry Ltd
BlackBerry is a manufacturer, marketer and designer of wireless solutions for mobile communications all across the world. It provides several platforms and solutions for flawless access to the information including voice, email, Short Message Service (SMS), instant messaging, internet and intranet based browsing and applications through its integrated software, hardware and services.