1. kevinnugent's Avatar
    Seems it may not be.

    Fairfax Financial’s $4.7 billion offer to take BlackBerry private is fairly unorthodox. In the first place, Fairfax made the offer public without raising anywhere close to the amount of capital it needed to complete the deal. Second, Fairfax is under no obligation to actually make good on the bid if BlackBerry can’t find a more attractive offer. As Wellington Financial’s Mark McQueen puts it, Fairfax seems intent on testing the “limits of [merger and acquisition] creativity.”

    “In my life I can’t recall a ~$5 billion cash takeover bid being announced without the financing being lined up in advance,” McQueen writes. “Often, the Regulators don’t allow such a tactic… Compare that to Michael Dell’s going-private of his company, where Mr. Dell rolled his 16% stake plus contributed another meaningful quantum of new dough to bring his partner Silver Lake on board.”

    McQueen suggests that because of this, the Fairfax offer doesn’t yet qualify as an official bid but more “a premise of a bid.” What’s more, he thinks that Fairfax is fooling itself if it announced the proposal publicly to draw in larger players such as Microsoft or Lenovo.

    “An unfinanced LOI isn’t going to fool any serious buyer,” McQueen concludes. “I don’t think Microsoft will suddenly try to top him at $11/share. If they want the company, they now know they can buy it for in and around US$9.00 a share.”

    Tags:BlackBerry
    Via: CrackBerry
    Source: Wellington Financial
    richardat likes this.
    09-26-13 02:54 AM
  2. FFR's Avatar
    It doesn't seem genuine.
    Blackberry canceled the earnings call citing fairfax's intent as the reason for the cancellation.
    09-26-13 05:14 AM
  3. richardat's Avatar
    Unknown. It's fishy....the nice thing for Prem is, there's no downside at all to this for him. If he got the money, there is likely no downside there either....he could probably come close to making back the money with a break up sell-off....and maybe even make some of his lost money back.....if there is no buyout, he was going to lose even more money anyways.
    09-26-13 05:42 AM
  4. njblackberry's Avatar
    Normally if a qualified, genuine bid is made for a company, the price of the stock moves to at least (at a minimum) the amount of the bid. As other pundits have posted here, this is "a floor". The stock is now almost $1 below the very shaky offer.

    I doubt if Mr. Watsa will be putting together a bid of $9.
    09-26-13 05:48 AM
  5. FFR's Avatar
    Unknown. It's fishy....the nice thing for Prem is, there's no downside at all to this for him. If he got the money, there is likely no downside there either....he could probably come close to making back the money with a break up sell-off....and maybe even make some of his lost money back.....if there is no buyout, he was going to lose even more money anyways.

    Classic Bait & Switch.

    "The agreement also doesn't compel Fairfax to ultimately come forward with a firm offer, underscoring the weak negotiating position BlackBerry finds itself in. BlackBerry, on the other hand, would have to pay a breakup fee of more than $150 million if it turns to another buyer by Nov. 4."

    Watsa even gets a finders fee, if it doesn't backfire, and if it does he can just walk away.

    "BlackBerry's unusual move to put together a loosely structured deal was motivated by its rapidly deteriorating business, several people close to the situation said. By publicizing a deal with a starting price, the company's hope is that will lure rival offers for part or all of BlackBerry, one of the people said. This person characterized the proposed deal with Fairfax as a "backstop" in case nothing better comes along."


    http://m.europe.wsj.com/articles/a/S...?mg=reno64-wsj
    09-26-13 06:11 AM
  6. Bluenoser63's Avatar
    Seems it may not be.

    Fairfax Financial’s $4.7 billion offer to take BlackBerry private is fairly unorthodox. In the first place, Fairfax made the offer public without raising anywhere close to the amount of capital it needed to complete the deal. Second, Fairfax is under no obligation to actually make good on the bid if BlackBerry can’t find a more attractive offer. As Wellington Financial’s Mark McQueen puts it, Fairfax seems intent on testing the “limits of [merger and acquisition] creativity.”

    “In my life I can’t recall a ~$5 billion cash takeover bid being announced without the financing being lined up in advance,” McQueen writes. “Often, the Regulators don’t allow such a tactic… Compare that to Michael Dell’s going-private of his company, where Mr. Dell rolled his 16% stake plus contributed another meaningful quantum of new dough to bring his partner Silver Lake on board.”

    McQueen suggests that because of this, the Fairfax offer doesn’t yet qualify as an official bid but more “a premise of a bid.” What’s more, he thinks that Fairfax is fooling itself if it announced the proposal publicly to draw in larger players such as Microsoft or Lenovo.

    “An unfinanced LOI isn’t going to fool any serious buyer,” McQueen concludes. “I don’t think Microsoft will suddenly try to top him at $11/share. If they want the company, they now know they can buy it for in and around US$9.00 a share.”

    Tags:BlackBerry
    Via: CrackBerry
    Source: Wellington Financial
    Fairfax and Prem are staking their reputation on the deal. If it doesn't go through or was a fraud, then the downside is that his ability to make deals in the future is hindered.
    KDB84 likes this.
    09-26-13 06:46 AM

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