Blackberry (T.BB) completes $1 billion Fairfax financing

Chris Parry Chris Parry, Stockhouse.com
0 Comments| November 13, 2013


WATERLOO, Ont. - BlackBerry Ltd. (TSX:T.BB, Stock Forum) has completed the US$1-billion financing that the smartphone company announced early this month after Fairfax Financial scaled down a larger plan to buy the company outright.
 
According to regulatory filings, more than half of the money came from two institutional investors: $300 million from Canso Investment Counsel Ltd. of Richmond Hill, Ont., and $250 million from Fairfax Financial Holdings Ltd. (TSX:T.FFH, Stock Forum), BlackBerry's largest shareholder.
 
Fairfax and the other investors have another 30 days to buy an additional US$250 million of the interest-paying notes, which can be used to buy BlackBerry shares for US$10 each.
 
BlackBerry shares were at C$6.77 in Toronto and US$6.475 on Nasdaq, where most of the company's shares are traded, down from US$7.77 on Nov. 1, before Fairfax changed its proposal.
 
BlackBerry announced it was no longer seeking a buyer and would continue as an independent publicly-traded company, indirectly acknowledging that Fairfax hadn't found support for a US$4.7-billion deal that required a group of investors to pay US$9 per share in cash.
 
Funds managed by Mackenzie Financial invested $200 million, $100 million came from Qatar's sovereign wealth fund, $70 million from Virginia-based Markel Corp. and $10 million from Brookfield Asset Management of Toronto (TSX:T.BAM.A, Stock Forum), according to a Nov. 8 filing.
 
Funds managed by Manulife Financial Corp. (TSX:T.MFC, Stock Forum) also invested $70 million to acquire BlackBerry's convertible debt, which can be exchanged for shares of the company under certain conditions.

Tags: COMMUNICATION EQUIPMENT INSURANCE - PROPERTY & CASUALTY

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