Can Fairfax rescue sinking BlackBerry Ltd (NASDAQ:BBRY)

Posted by Lynn Eisler September 24, 2013 0 Comment 862 views

The will be, won’t be game is over. The Fairfax consortium has bid to take BlackBerry Ltd (NASDAQ:BBRY) private and the smartphone maker has agreed. The company has been through years of rough weather and was unable to weather the market storm any longer. Its market share had dropped drastically and it was just a matter of time before it bowed down to the pressure.

Probably the only one

This offer has come from a group led by Fairfax Financial Holdings Ltd which is a casualty and property insurer. The die has now been cast with the tentative offer of $9.00 per share will be the baseline of any counteroffers that might come in from the company that has been in up for sale since August. Prem Watsa is the Chief Executive Officer of Fairfax, which is BlackBerry Ltd (NASDAQ:BBRY)’s largest investor. He is known to be a man with vision and a long-view.

There was a time when BlackBerry Ltd (NASDAQ:BBRY) devices were the preferred choice of those who worked in corporates. Professionals such as lawyers and bankers also chose Blackberry devices over other ones in the market. This trend had taken the company’s share to peaks of more than $148.

“The Special Committee is seeking the best available outcome for the Company’s constituents, including for shareholders,” Barbara Stymiest, chair of the board at BlackBerry, said in a statement. “Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.”

Market reaction

In Monday’s trading session, BlackBerry Ltd (NASDAQ:BBRY) stock rose by 1.09%. The opening price of the shares was $8.26 which touched an intraday high of $9.20 and dipped to close at $8.82. Approximately 110.68 million shares were traded on Monday. An average volume of 31.00 million shares were traded over a period of 30 days. The 52-week low of the shares was $6.22 and the 52-week high was $18.32. The company has a market cap of $4.62 billion. The market reaction to this news has been very nonchalant and it seems like no counter bid will surface at all.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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