UPDATE 2-Fairfax struggles to raise funds for BlackBerry bid -sources

Fri Nov 1, 2013 6:57pm EDT
 
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By Soyoung Kim, Nadia Damouni and Nicola Leske

NEW YORK Nov 1 (Reuters) - Fairfax Financial Holdings Ltd is struggling to raise financing for its $4.7 billion bid for BlackBerry Ltd, with several large banks declining to participate on concerns that the smartphone maker will not be able to reverse its fortunes, according to people familiar with the matter.

Fairfax, which is run by Canadian financier Prem Watsa, is working with Bank of America Merrill Lynch and BMO Capital Markets to put together a lending syndicate for a deal, but they have been turned down by several large lenders, the sources said.

Bank of America Merrill Lynch and BMO both have deep pockets themselves, and it is still possible they will muster the necessary financing for Fairfax to submit a definitive bid.

Fairfax, the largest shareholder in BlackBerry with a 10 percent stake, reached a tentative $9-per-share deal with BlackBerry in late September, and has until Nov. 4 to negotiate a definitive agreement.

Several other potential bidders are also mulling participation in BlackBerry's future. The deadline for them to submit bids for the company is also Monday.

Fairfax and BlackBerry declined to comment.

The difficulties Fairfax has had in raising financing underscore the fading relevance of BlackBerry, which once pioneered on-the-go email but has bled market share to Apple Inc's iPhone and devices using Google Inc's Android software in recent years.   Continued...