Brad Reed

We may see a lot of action surrounding BlackBerry over the next 60 days while Fairfax Financial conducts its due diligence and while BlackBerry seeks out alternate bids. One particularly interesting thing to watch will be if the Fairfax offer draws any outside interest from companies who are interested in BlackBerry’s patent portfolio, which has an estimated worth of between $2 billion to $3 billion. Chris Marlett, CEO of IP-focused investment bank MDB Capital Group, tells CNN that BlackBerry’s patent portfolio could draw substantial interest because it’s the last major treasure trove of mobile patents that hasn’t been gobbled up by the larger players in the smartphone market. More →

Although Fairfax Financial is offering to pay $4.7 billion to acquire BlackBerry and take the company private, it’s still giving the BlackBerry board of directors some time to shop around for better offers. The chances of BlackBerry scoring a deal better than the one Fairfax is offering seem decidedly slim at the moment, however. Per Barron’s, Citigroup analyst Jim Suva writes that Fairfax likely went public with its buyout proposal to spur other bids in the company, an event that he describes as “unlikely.” What’s more, Suva thinks that Fairfax may have difficulty raising the capital it needs to buy BlackBerry because “the severity of [BlackBerry's] business fundamentals deterioration poses a real risk in this transaction.”

BlackBerry’s fate is coming into focus. The company announced on Monday that it has signed a letter of intent with a consortium led by Fairfax Financial to buy out the company for about $4.7 billion, or $9 per share. Fairfax CEO Prem Watsa, a former BlackBerry board member, said that the buyout would make BlackBerry a private company and would “open an exciting new private chapter for BlackBerry, its customers, carriers and employees.” BlackBerry says it expects Fairfax to finish conducting its due diligence by November 4th. Even though the deal is non-binding at this point, BlackBerry will still have to pay Fairfax a fee of $0.30 per share if the deal doesn’t happen. BlackBerry shares jumped about 3% on on the news. The company’s full press release follows below.

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