BlackBerry Ltd. on Monday announced it had signed a letter of intent to be acquired for US$4.7 billion by a consortium led by Fairfax Financial Holdings, which would take the smartphone manufacturer private, according to a news release on BlackBerry’s website.
The consortium would acquire all outstanding shares not currently held by Fairfax, which owns 10% of BlackBerry’s common shares.
The consortium is seeking financing from Bank of America Merrill Lynch and BMO Capital Markets, according to the release.
The news release did not indicate the other members of the consortium. Officials at BlackBerry and Fairfax did not respond to calls seeking information on other consortium members.
Recent reports indicated that Canadian public pension plans were cool to the idea of investing in BlackBerry. The C$183.3 billion (US$178.4 billion) Canada Pension Plan Investment Board, Toronto, had no comment on Monday’sSept. 23 BlackBerry announcement, said spokeswoman Linda Sims.
“We never discuss publicly whether or not we plan to enter into any investment,” said Deborah Allan, spokeswoman at the C$129.5 billion Ontario Teachers’ Pension Plan, Toronto. “We don’t respond to rumors.”
The C$60.8 billion Ontario Municipal Employees Retirement System, also in Toronto, did not return calls for comment by press time.
Due diligence on the agreement is expected to be completed by Nov. 4, according to BlackBerry. Before that date, BlackBerry is allowed to look for “and potentially enter into negotiations with parties that offer alternative proposals,” according to the release.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Prem Watsa, chairman and CEO of Fairfax, said in the BlackBerry news release. Mr. Watsa stepped down from BlackBerry’s board in August.
J.P. Morgan Chase and Perella Weinberg Partners are advising on the deal, according to BlackBerry.
According to Bloomberg data, among pension funds, Ontario Teachers holds 1.97 million shares of BlackBerry, or 0.38% of all outstanding shares; while the CPPIB holds 1.27 million shares, or 0.24%; the US$58.3 billion Virginia Retirement System, Richmond, holds 243,000 shares, or 0.05%; and the $97 billion State of Wisconsin Investment Board, Madison, holds 230,000 shares, or 0.04%.