The head of Fairfax Financial Holdings Ltd. said on Wednesday he has every intention of completing the acquisition of BlackBerry Ltd
, despite doubts that the $4.7 billion deal for the troubled smartphone maker will go through.
BlackBerry announced earlier this week that Fairfax signed a letter of intent that "contemplates'' buying BlackBerry for $9 a share. Fairfax, BlackBerry's largest shareholder, is trying to attract other investors.
BlackBerry shares on Wednesday lost 6 per cent, closing a dollar below Fairfax's bid on fears the deal won't happen.
There is no breakup fee should Fairfax walk away, but Fairfax Chief Executive Prem Watsa said his firm is not in the business of making an offer and then walking away or redoing the deal.
"We've got a track record of 28 years of completing what we've done. We've never re-negotiated,'' Watsa said. "We thought long and hard before we offered $9 dollars a share and we're not in the business of offering a number and at the last minute changing the figure. Over 28 years our reputation is stellar on that front. We just don't do that.''
Watsa noted the deal is subject to six weeks of due diligence but stressed Fairfax won't abandon it.
Watsa stepped down as a board member last month because of potential conflicts when BlackBerry announced it was considering a sale. If the proposed deal goes through, BlackBerry would go private and no longer be traded publicly.
Watsa said Fairfax won't be contributing more to the bid than the 10 percent it already owns.
"The 10 percent is like $500 million. It's a significant amount of money,'' he said. "We're going to bring equity partners and we think the company will be very well capitalized.''
He declined to name the other investors he is trying to bring in.
Bernstein analyst Pierre Ferragu said the lack of details make the chances of the deal going through appear grim. Ferragu noted that Fairfax is not committing any more equity and said