Prem Watsa says he's confident about bid for BlackBerry

By Adam Zeis on 25 Sep 2013 05:27 pm EDT
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While some reports are saying that the bid entered by Fairfax Financial to buy BlackBerry for $4.7 billion won't succeed - Fairfax CEO Prem Watsa begs to differ. Even though the deal may not yet be fully financed, Watsa said in an interview with Reuters that he is confident in the bid, which puts shares at $9.

Fairfax is also BlackBerry's biggest shareholder and Watsa does not expect to have to contribute more than their 10% stake to the 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"

The diligence period for the deal is set to be complete by November 4th, though BlackBerry is still able to actively seek and evaluate other potential buyers during that time. It's not likely that anyone will come along with a better offer, but the possibility is always there. 

Read more on what happens now for BlackBerry and Fairfax

Reader comments

Prem Watsa says he's confident about bid for BlackBerry

116 Comments

I heard he taught Jeffrey Dahmer and Luka Magnotta everything they know.

Posted via CB10 from the BlackBerry Z10

Of course he is. Because if the deal falls through he still makes 150+mil. He's in the money either way

Posted via CB10 on my Z10 Oreo

Conversation that was overheard at a swanky steak house.*

Boulben: Hey Thor, do you think we should be putting more money into our commercials?

Heins: Nah, we told everyone to sell like hell. That's free marketing.

Boulben: So what should we do with our marketing budget?

Heins: Let's blow it on some jets. This company's going down. Might as well milk what we've got.

Boulben: But you're the CEO. Shouldn't you try to do something to save the company?

Heins: Nah, I've got a fat pay day comin' up. The sooner this company goes down the sooner I get my money.

Boulben: When you took over as CEO, the stock price was $16. Now it's at $8. How are you going to answer to the media during the earnings call?

Heins: Let's just cancel it.

Boulben: Well done!

Heins: Get Watsa on the phone for me....
========

Watsa: Hello.

Heins: Watsaaaaaap!

Watsa: I told you not to call me that.

Heins: Ya, ya. I promised to get to stock price way down so you and your boys and buy us up for cheap.

Watsa: You did real good. You will be rewarded handsomely.

Heins: Better be at least another $50 mill. Anyway, see you at the strip club tonight?

Watsa: You bet.

*(Names used and scenario are purely fictitious. Any resemblance to real life persons and events are purely coincidental.)

Hahaha, funny, especially the "Watsaaappp!" part, lol! But I'm really sad about what's happening to BlackBerry... :(

Posted via CB10

Awesome....all this additional negative news about the deal joy going through was getting me nervous.

Posted via CB10

Same here. I will continue to be nervous until this deal is in the books. Then, wait and see if keeping BlackBerry is actually Prem's objective.

LOL sorry I always wanted to do that, nice article :3 I support BlackBerry from México until the Enddd

Posted via CB10

The media are like hungry piranhas. Prem Watsa needs to start leading this company by instilling solid confidence that BlackBerry is secure and isn't going nowhere.

-aBBuser

Sorry, I want to add he could change the perception of the direction BlackBerry is heading by acting like "big daddy" coming save the day and be like when Steve Jobs came back to save Apple.

-aBBuser

Microsoft was also concerned about anti trust problems because if Apple had gone under Microsoft would have had a de facto monopoly and might have been broken up by regulators.

@shoots; The feds went after MS in '01, 4 years after MS bailed out Apple. Apple has been threatened with antitrust recently. Its the price paid for wildly successful consumer products. BlackBerry doesn't have to worry about that now

Posted from my 6230

I don't get it. Watsa is offering $9 per share, so why did the share price close at $8.01 today?
Why would anyone sell their shares for less than $9?

If you believe him then the more important question for you is why aren't you buying all of $8 BBRY shares you can get your hands on? In 6 weeks you will make 11% on your money. You can't be that.

I'm assuming the stock price will drop more when they announce there quarterly results.

Posted from My all in one beauty Z10

I am hopeful that the ER can do no more damage to the price. Surely, all the bad news was released last week and has been priced into the shares.

Barring something like a huge BBM4ALL launch, the price in the near term will be based solely on the perceived likelihood of Prem finding funding for his offer (and any seemingly diminishing hope of a rival bid).

Posted via CB10

"Keep some powder dry until Monday" .... with 150 million shares short - Friday's earnings report will, probably, be met with a lower price... pick some up Monday, or Friday afternoon if they announce before "open"

When is BlackBerry announcing on Friday?

There is a clause in the letter of intent that allows Fairfax to lower the bid as they see fit without penalty. So basically $9 is a ceiling unless BlackBerry can find someone who would pay more.

The $9 price isn't fixed. Fairfax can lower the price during/after the due diligence period. Fairfax and BlackBerry haven't signed the final deal.

Yeah so basically it can go down easily. Going up is the hard part unless someone else puts up a offer

Posted from My all in one beauty Z10

Because there is skepticism that this deal will get consumated. Remember Prem really has only put in an offer with a due diligence clause attached meaning he, and more importantly his financial backers / partners on this deal will first want to go over the books etc with a fine tooth comb. If he or those putting up the actual funds for the purchase do not like what they see, the deal is off.

Weather or not Prem is a billionaire is hard to know because he leaves that part of his life very private however checking his ownership of ffh would be a pretty good indication since he has always maintained that was the is where majority of his wealth is. Having said that though the holding company he controls probably has (from last time I checked )about a billion -2 in cash however he is not going to drain every cent of holding company cash to add to ffh share especially since he has "reiterated" they won't be upping their stake.
I have owned FFH for quite a few years. I respect the man. What I told you is what the situation is, why the stock price is still getting hit.

The idea that some are starting is that Fairfax either won't pay $9 or they won't get the financing. Given the large number of short positions, I'd suspect that someone is seeding doubt.

It's odd to see articles on the same financial sites where one says $9 is far too low for BlackBerry's value and another says Fairfax won't get financing for the $4.7 billion.

The important thing to remember is that the stock market is not rational. What the doubt is doing is opening up an attractive arbitrage situation for anyone that thinks the $9 deal will go through.

Posted via CB10

He needs to ensure all marketing team is fired and that all new BlackBerry devices come with the latest CPU and Megapixels for the cam and memory. Thats the only way to compete out there!!!

Add up the constant R&D and constant innovation

Posted via CB10

The device is as faster or faster than anything else on the market with the current CPU thanks to the efficiency of QNX.

And the point of Ka Nos' post is that the vast majority of people don't know that so they won't care. The app situation is another killer. But Frank Boulben failed at getting people to see that BB10 was just as good without all the gimmicks.

Agreed, maybe he should go the other way. Put QNX on budget hardware, and give everyone a great smartphone experience cheaper than anyone else, due to efficient code. Pump out a bajillion of them, and "get some!!" (marketshare, that is)

Highly unlikely they are even going to look/pursue any other offers. The management team more than likely has some ridiculous golden parachute cluase in their contract and get paid entirely too much regardless of what happens to the company.

Screwing me over as a stock-holder doesn't bode well for me continuing to be a customer in the future.
We've watched entirely too many bad decisions for too long. This could have been avoided.

Prem has more info than any of us will ever be privy too. Any doubts his decision is based on that info?!

You made the decision to buy BlackBerry's stocks and enter the stock market, thereby making a gamble that it would pay off. If you don't know that there's a high risk of you losing your investment in the stock market, you shouldn't have invested.

Despite the conspiracy theories, you can't very well blame BlackBerry for making THEIR OWN stocks price go down,Now can you?

--Q10 and Canadian all the way! Posted via CB10 on 10.2.0.1443. #IChooseBlackBerry10

Yes- he CAN blame BlackBerry for making their own stock price go down! Whose fault is it if not theirs? Do you understand how the stock market works? BlackBerry drove themselves to the ground, so the stock fell. That is the fault of BlackBerry unless of course you believe it is the "dumb isheep" or the "evil media" who are responsible for all this! If a business doesn't perform, their value is lowered, and their shares become almost worthless. That is what happened here.

Posted via CB10

How dare you bbq! How can you post a rational, objective thought!? Of course it's the media's fault! BlackBerry should've been allowed to make colossal mistakes without the mistakes being reviewed editorially. Of course it's the iSheep's fault because they dared to appreciate a bigger screen and apps. Of course it's a conspiracy because no one else waited besides us for BlackBerry to catch up. I for one don't appreciate your post, I prefer to lament about the fall of what used to be THE leader in smartphones due to a lack of leadership and vision. So please post subjective, misguided thoughts the alternative scares me!

Posted from my 6230

I am with you on the "screwing" part, MLE, but I had a Galaxy S3 before my Z10 and Z10, Q10, Z30 is still the "best choice"...

Be patient, Prem is going to start a "BlackBerry Good News Campaign" next week to get us all a "better bid" on BlackBerry... Be careful about Friday...

Stock Speculation - So this in theory can be a possibility to buy stocks @$8 and ia aure to eatn a buck? Or something fishy ia bound to happen? Something is not right.

Posted via CB10

You know, it's not bad enough that the tech and financial press practically kick Blackberry into the grave, but when a lifeline is thrown, they question the capabilities of the rescue party.

Enough Already! When a guy who controls one of Canada's most successful financial companies makes a bid, you gotta assume it's serious. Advantageous to him, certainly, but calling it "not serious" sounds like the worst sort of cynicism.

Why do you have to come in here and state the obvious with such a strong, simple and logical explanation..
/sarcasm

+1000

Whomever signs onto this financing deal will happy about it in the end.

The Ontario Teacher's Pension seems like a good match, because they don't seem to mind hanging onto an investment for the long haul.

Sent from my BlackBerry Z10

Latest thing I read is the Pension thing has stalled because they only want parts of BlackBerry - not the whole. Bad news.

Posted via CB10

I read that too. If blackberry is torn apart its worth more to the shareholders. But that would also mean the end of Blackberry as we know it.

Trolls saying it won't close don't know much. The thing that I am passed about is that it has to be worth more than 9 bucks. That is silly low.

Posted via CB10

A couple of guys on the BBRY thread just sold, today, closer to $8 and took their losses. They aren't trolls and I don't think they think the $9 price is silly - they don't think it's achievable.

So if this goes through, when could I reasonably expect to offload my stock? And would I get the full $9 per share?

Posted via CB10

you can expect to unload your stock AFTER the deal closes. if you sell it before then you will get whatever the market price is at the time of your sale.

Considering all the articles noting that Fairfax has not putting any money on the table (other than that already invested in its BlackBerry holdings), this is a nice reminder that Watsa does have something else at risk, his reputation. Maybe not as strong as a signed contract, but I believe that he will do everything he can to close at $9.

Posted via CB10

Go get em, Prem. On Monday, let's launch cross platform BBM, announce some big deals and go get a "real bid" for BlackBerry.

Prem, are you with me or against me?

Get er done.

Posted via CB10

But it would make sense for him to want the price drop more so he can give a lower bid. Not a good time to be a shareholder..

-aBBuser

There's more to it than it meets the eye. Market is always right. BBRY closing at $8.01 today says the valuation of $9 was also high. Offer will be adjusted to a cheaper valuation. If Fairfax deal doesn't go through then we can call it BlackBurried.

Posted from BlackBerry Pearl

Adam - why so "negative" on another offer for BBRY? We are in the top of the second inning on this one.

Another bidder has no reason to show their cards for a couple of weeks.

Chillax. We got Prem and "who knows who"....

Let's see how bloody Friday is then we tien on the "good news spiggot" next week and get this party started.

Thanks for bwing "worthless", Frank......

Posted via CB10

TH should announce he resigns on Friday.. that will boost the stock. We need lazaridis back
Blackberry should announce a partner or licensing deal, they need a backup plan that they can survive on their own. BBM rocks

The day the current CEO announced the 2nd delay of bb10 I knew he wasn't the right person for the job. He was not charismatic and he was brought up from the same group of leaders who brought us bbos6/7. None of them wanted change even though ios and android was stealing the market share. He was the same as the previous owners.

BlackBerry needed someone from the outside who would be willing to take risks and fire in component employees. A person with enthusiasm and a forward thinking mindset. But the BlackBerry fans thought T.H was the right person for the job.

Posted via Z10

Hindsight is great, isn't it? :)

When BB10 was delayed the second time, I remember T.H. saying something along the lines of BB10 not "being good enough" at that point in time, and wanted to release a better product, later, in a less crowded time in the Market place. And fair play!

Could you imagine if, say, BB10 didn't have E-mail and BBM upon release? Or what if the Mobile Data connection constantly crashed.

Something would have been terribly wrong with the team if that was to happen. bb10.1 is what bb10 should have been from day 1.
Just some thoughts of mine..

Posted via Z10

I disagree, in that, the timing of BB10, actually, wound up to be a very "quiet" time in the industry and if Frank Boulben was not a complete incompetent and put together a strong "marketing plan" - BB10 launch could have been a huge success....

Oops :)

"wanted to release a better product, later, in a --less crowded time in the Market place--."

But yeah, I agree with your points

FWIW, Fairfax has put forward, and the Board of Directors accepted, a Letter of INTENT (LoI).

This is considerably different than an offer to purchase.

The LoI has a number of conditions that have to be satisfied. IF one of the conditions is unsatisfactory, the terms offered in the LoI can be amended.

That's why the smart money isn't rushing out to buy BBRY at $8 to flip it in a month at $9. There is a real chance that something may be found and a lower price per share finalized.

Of course, in November everything should be locked down and only then will everyone know what just happened.

(As far as the real value of the company is concerned - as I try to show everybody in my family - things are only worth whatever someone else is willing to pay. No more, no less. I can claim my BlackBerry shares are worth $25 each. The problem comes with finding someone to pay that much for them.)

Posted via CB10

@ Sto - do you really think there is anything that Prem "doesn't know about BlackBerry" after having sat on the board?

Just get the Z30 to TMUS....

Well, wasn't this what all the hubbub and news on Friday was about? If there was something "materially different" from previous guidance, they had to disclose it before the earnings call? How much worse can it get?

From what I have read company value is $7 a share. Cash on hand brings it up to $9. By the time TH came on board it was already 4+ years to late for any fast turn around. Let's hope this save BlackBerry from extinction.

Posted via CB10

Conference call cancelled on Friday. T.H trying to save face after disastrous reports AND a failed attempt at launching BBM.

Posted via Z10

Everyone - latest news is that the Teachers Pension has stalled. They only want parts of BlackBerry and not the whole- Already trying to break it apart.

Posted via CB10

If Prem Watsa takes over BlackBerry , Keeps it Canadian , Establishes strategic partners and turns BlackBerry around for a stink Bid of $9 Bucks he is the genius that he has always been.

Hey, Prem throw us a bone and spin-off a yielding tracker stock of BlackBerry with a 5% yield.

If we take Chris Umi numbers on BBM and if BBM Channels becomes a e-commerce success , plus BBM Money, I am sure the cash-flows from BBM could warrant a BBM Tracker Stock paying a 5% yield !!! Come on Canadians, sure Jim and Mike made a mess but lets back-up Prem and turn BlackBerry into a Champion !!!

"Prem Watsa said that he is confident about bid for BlackBerry"

Professional gamblers always do that... trying to convince himself...

Posted via Z10

I remember 2005/2006 Prem Watsa was shorting the USA housing market and Fairfax stock was down 50% from 2003 to 2007 rumours said he was done, but with $200M which he later turned that into $2B by shorting the USA housing made him into a genius.

Well do you think PW will up the bid if the shareholders reject the $9/share offering? How much does he need Blackberry and does Blackberry needs him or it is an arrangement to save his stake and slow the down turn . Seems more like a distraction.. we shall see the BOD are idiots, how can they agree to a LOI and can still shop around.. Sounds very fishy. Sounds like BB and PW are buying time. I wonder if something else is in the works.. his $9 bid is just a distraction

I believe it was a play to stop the bleeding. BBRY investors need to grow some thick skin and stop reading short trader articles.

What I would take is some fraction of Fairfax stocks for my BB shares ;) Now that would be a deal.. BB comes back, FFH makes a profit.. FFH shares go up That would please current shareholders

That would be like giving me Apple stock in exchange for Blackberry stock. NO WAY. Stock in the 4-$500 range is destine to crash and burn.

He is so confident about the future of Blackberry that he does not want to use his money but he rather borrows from banks...

As far as any other offers coming in, I would think that if I was cisco or apple etc... I would keep that tight till the third of November to avoid a crazy bidding war no? Prem set the low bar so until there is one counter offer in play everyone interested in taking a stab can relax for the moment and keep out of the public eye. Am I wrong? I don't know I just hope the best for BlackBerry...

Posted via CB10

This deal looks contrived and manipulated. It indicates clearly the fact that companies now have very little in the way of principles or responsibilities. Cancelling the press conference is like Harper peroguing parliament. Citizens of the world, we need to wake up. Do ends justify the means? No. I feel like selling my BlackBerry just because of this. But I imagine that other companies do the same. I hope if there is something is in this deal, it's caught and perpetrators are duly identified and brought to justice.

Posted via CB10

Done and done. BlackBerry doesn't want another buyer and it is closed deal already as BlackBerry LOI does nothing but stops all other bidders even with bids higher than 4.6 bil. It is a done deal and the rest of things such as deadlines and timings are just formalities of such transactions.

Posted via CB10

At this point I'm more interested in hearing about their intentions, just how honorable are these guys. If Thor stays and its business as usual, just aimed a more nieche market I'm perfectly happy with that. They've been doing a good job in my opinion over there in Waterloo and nothing really needs to change

Stock dropped to 8.03 today on fear that Fairfax can't close the deal.

Kids, its over.

Posted via my BlackBerry Z10

Yeah, but hes got to get a majority vote from investors, and I do not think they will give up their shares for $9. This would be like handing over the deed to a mine not knowing there was gold in it.

This guy and his company are in all seriousness a big fucking joke! You are confident about the deal but you need $1.6 billion dollars or more from other investors to fully finance the buyout!

To me that sounds amateurish and idiotic. Not to mention that this supposed "save the day" deal sound more and more rotten and dubious.

Mr. Cryptkeeper, aka Pringle Watsahisname, has, I think, no intention of saving BlackBerry past recouping his own investment, dammed be the employees, customers and investors.

Heins Ketchup and the Cryptkeeper surely think it worth to keep this whole sharade going for a little while longer in order to fool all the rabid fanboys who can't see past their own ass cheeks...uhhhhhh look the Z30...shinny! Don't worry about the almost 5,000 workers loosing their jobs, the lack of promotion and marketing and the fact that we are deliberately sinking out own ship...

Smoke bomb...

Posted via CB10

More stupid than BlackBerry company is making new devices and we have to download Alandroed files via CNC

Posted via CB10