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Billionaire Prem Watsa assures that $4.7bn BlackBerry deal will not collapse

BusinessNews
, 26 Sep 2013News
Billionaire Prem Watsa assures that $4.7bn BlackBerry deal will not collapse

Prem Watsa, the billionaire chief executive of Fairfax Financial, has said he believes the consortium he is leading to purchase BlackBerry for $4.7 billion (£2.9 billion) will be successful.

He defended the price offered and asserted that the consortium can raise the funds despite the figure not yet being reached. 

"We wouldn't put our name to such a high-profile deal if we didn't feel confident that at the end of the day that our due diligence would be fine and we'd be able to finance it," Watsa said on Wednesday.

"We thought long and hard before we offered $9 (£5.60) 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," he added.

There is also a clause that Fairfax receive no penalty if it pulls out, but would be handed a $150 million (£93.4 million) payout from BlackBerry if the smartphone maker pulls out.

Amidst fear that the deal could collapse, BlackBerry shares on Wednesday closed at $8.05 (£5), almost a dollar down on on the offer submitted by Watsa on Monday.

Addressing the drop in share price Watsa said: "Short term these things fluctuate, there is speculation one way, there's speculation the other way. We never pay too much attention to the marketplace."

The Watsa led Canadian consortium is currently the only bid submitted for BlackBerry. Fairfax Financial is already the firm's biggest shareholder with a 10 per cent stake.

The offer came following a warning by BlackBerry that it is set to make a quarterly loss of $1 billion (£623 million) and will need to cut 40 per cent of its employees.

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