Investors are growing more skeptical that a tentative $4.7bn bid for smartphone maker BlackBerry Limited will succeed, with the stock trading at the biggest discount among similar North American takeovers.
Fairfax Financial Holdings Limited’s $9-a-share tentative offer for BlackBerry is 17 per cent higher than the current stock price, the widest spread of 109 announced deals worth $1bn or more, according to data compiled by Bloomberg.
Bloomberg News reported on Friday, that BlackBerry fell by 0.4 per cent to $7.70 at 1 p.m. in New York, dropping its market value to $4bn. The stock closed at $7.69.
The slide reflects shareholder concerns about Fairfax Chief Executive Officer Prem Watsa’s ability to secure his partners’ commitment and financing before a November 4 deadline.
Watsa said when he announced the September 23 offer that he had yet to secure financing and would only name his partners after they had done the due diligence and were fully committed.
“The reservations are adding up,” Sachin Shah, a strategist in special situations and merger arbitrage at New York-based Albert Fried & Company, said in a telephone interview.
“It keeps on trading based on people’s interpretation of what other people think is going to happen rather than what Prem is saying will happen.”
Since Toronto-based Fairfax announced its letter of intent, BlackBerry has given more details about its deteriorating financial situation.
No comments:
Post a Comment