Fairfax Financial Holdings Ltd., which has until Nov. 4 to firm up its $4.7 billion bid for BlackBerry Ltd., has yet to arrange financing to take the company private, said people with knowledge of the matter.
Fairfax’s advisers, Bank of America Corp. 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 is private. Fairfax may ask BlackBerry to extend the deadline by which it has to firm up the offer, one person said.
Among the banks contacted was Credit Suisse Group AG, which passed on being part of a group of lenders when it found tepid demand among loan investors, one of the people said. Banks are reluctant to finance the leveraged buyout of the struggling smartphone maker, which has reported losses for five of the last seven quarters, said the people.
Fairfax may yet pull together the funds to see its bid through, said one of the people.
Fairfax President Paul Rivett did not return an e-mail and phone call seeking comment. Fairfax CEO Prem Watsa declined to comment on his company’s bid when asked on an earnings conference call today. Adam Emery, a spokesman for BlackBerry, declined to comment. A Credit Suisse spokesman wasn’t immediately available to comment.
Fairfax, BlackBerry’s largest shareholder, made $9-a-share tentative offer Sept. 23 and said it intends to negotiate a “definitive” agreement by 5 p.m. on Nov. 4. The Toronto-based firm has yet to name any partners or say it’s raised any money for its bid, and hasn’t said what will happen if it can’t do so.
Watsa, 63, who founded the Toronto-based insurer in 1985, makes contrarian bets that often pay off, including a stake in the Bank of Ireland that has risen 141 percent since Fairfax made an investment in July 2011. The offer to buy Waterloo, Ontario-based BlackBerry, which has lost more than 90 percent of its value since 2008, is his biggest publicly disclosed deal yet.