Fairfax CEO Prem Watsa to bid for BlackBerry?

Prem Watsa, chief executive of BlackBerry shareholder Fairfax Financial, is likely to bid for the struggling smartphone maker.

Fairfax Financial, both an investment vehicle and an insurance holding company of Prem Watsa, has around 10 percent equity stake in BlackBerry.

The Indian born Prem Watsa may bid for BlackBerry, a Reuters report suggested on Wednesday.

The 9.9 percent stakeholder could utilize his additional stake as and when BlackBerry can revive its fortunes. BlackBerry’s 2010 launch of BlackBerry Playbook tablets and 2013 launch of BlackBerry 10 OS and smartphones did not find any takers from the mobile market.

Mobile industry analysts are speculating that there will be no smartphone makers bidding for BlackBerry which lost considerable market share in the last two years to Samsung and Apple.

BlackBerry does not find a place in the top 5 smartphone players in the world based on shipments. ( smartphone market share list for Q2 2013 )

Since January 2012, Fairfax has raised its stake in the company from just over 2 percent to just under 10 percent. Analysts are cagey about the future potential of BlackBerry. Does the market need BlackBerry phones in the wake of innovative and nextgen phones coming competition.

Watsa stepped down from the BlackBerry board on Monday, citing a potential conflict of interest, as the company said it was exploring the sale of itself and other options.

Any takers for BlackBerry

Fairfax, with a market capitalization of C$8.7 billion, would be small to buy BlackBerry outright. The smartphone maker has a market capitalization of C$5.8 billion.

Scotia Capital analyst Gus Papgeorgiou recently said BlackBerry is worth $10.16 a share based on its cash and patents alone.

Currently, BlackBerry shares are trading at around $11 against $140 in May 2008.

BlackBerry is sitting on $3 billion in cash and has gobbled up patents or licenses to the tune of $3 billion. It also still boasts 72 million subscribers.

Fairfax Financial, which owns 9.9 per cent of BlackBerry, is reported to be in talks with private equity investors to find ways to take BlackBerry private and his departure is taken as a sign of potential interest.

Others who may want to buy the company could include the Canada Pension Plan, which has previously expressed interest, and private equity firm Silver Lake Partners, which reportedly has been in talks with the company on possible collaboration.

Will Google, Apple, Microsoft, Huawei, Samsung, Amazon.com, Lenovo, etc. show interest in Blackberry that reported a first-quarter net loss of $84 million?

Baburajan K
[email protected]