Fairfax Financial Holdings, which has until November 4 to firm up its $4.7 billion bid for BlackBerry, has yet to arrange financing to take the company private, said people with knowledge of the matter.
Fairfax's advisers, Bank of America and Bank of Montreal, have been rebuffed by other lenders they contacted to help finance a bid, said the people, who asked not to be named because the process isn't public.
BlackBerry gave Fairfax seven weeks to line up the financing, while it also sought competing offers. One potential counterbid could come from Cerberus Capital Management LP, which is teaming up with BlackBerry co-founders Mike Lazaridis and Doug Fregin to explore a deal, one person said. That group also is in discussions with Qualcomm about having the chipmaker join the coalition, said the person.
Cerberus, a New York-based private equity firm, has signed a nondisclosure agreement with BlackBerry to gain access to its financials, one person said. "Fairfax still may end up pulling together the funds to see its bid through, or it could ask BlackBerry to extend the November 4 deadline".
Qualcomm, meanwhile, will make a decision about whether to join Cerberus's effort after reviewing BlackBerry's finances, said one of the people. The company - the top supplier of chips for phones and tablets - gets the majority of its profit from licensing patents, which cover much of the fundamental technology in wireless networks. A stake in BlackBerry would give the company access to additional patents, as well as mobile-phone hardware and software.
Fairfax's advisers, Bank of America and Bank of Montreal, have been rebuffed by other lenders they contacted to help finance a bid, said the people, who asked not to be named because the process isn't public.
BlackBerry gave Fairfax seven weeks to line up the financing, while it also sought competing offers. One potential counterbid could come from Cerberus Capital Management LP, which is teaming up with BlackBerry co-founders Mike Lazaridis and Doug Fregin to explore a deal, one person said. That group also is in discussions with Qualcomm about having the chipmaker join the coalition, said the person.
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"Fairfax may not have been able to articulate a business plan," said Sachin Shah, a strategist in special situations and merger arbitrage at New York-based Albert Fried & Co. That may be the reason its bid has struggled, he said.
Cerberus, a New York-based private equity firm, has signed a nondisclosure agreement with BlackBerry to gain access to its financials, one person said. "Fairfax still may end up pulling together the funds to see its bid through, or it could ask BlackBerry to extend the November 4 deadline".
Qualcomm, meanwhile, will make a decision about whether to join Cerberus's effort after reviewing BlackBerry's finances, said one of the people. The company - the top supplier of chips for phones and tablets - gets the majority of its profit from licensing patents, which cover much of the fundamental technology in wireless networks. A stake in BlackBerry would give the company access to additional patents, as well as mobile-phone hardware and software.