Prem Watsa's Fairfax ups RIM stake, shares rise

Fri Jan 27, 2012 12:09pm EST
 
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By Cameron French and Alastair Sharp

TORONTO (Reuters) - Fairfax Financial (FFH.TO: Quote), the firm controlled by investor Prem Watsa, has more than doubled its stake in Research in Motion RIM.TO, a move that drove RIM's shares up nearly 3 percent on Friday.

The purchase, revealed in a U.S. regulatory filing, gives Fairfax a holding on par with longtime co-CEOs Mike Lazaridis and Jim Balsillie.

Watsa, Fairfax's reclusive CEO and a highly-regarded investment mind, was appointed to the struggling BlackBerry maker's board this week as part of a front office shakeup in which Balsillie and Lazaridis stepped down from their roles at the company's helm.

"I think it's a good confidence booster," Ian Nakamoto, director of research at Toronto broker MacDougall, MacDougall & MacTier, said of the share purchase, which gives Fairfax 5.12 percent of RIM. That is worth just under $450 million at Friday's prices.

RIM's largest shareholder is U.S. money manager Primecap Management Co, with a 5.54 percent stake.

Balsillie and Lazaridis hold 5.09 percent and 5.05 percent, respectively, according to Reuters data. Fairfax had held 2.25 percent of the company as of the end of September.

CREDIBILITY

Watsa, an Indian-born Canadian who took control of Fairfax in 1985, has built a reputation as a shrewd value investor in the mold of U.S. investor Warren Buffett.   Continued...