Toronto: Beleaguered smartphone maker, BlackBerry, has announced that it had an offer for $9 a share from a consortium led by Fairfax Financial Holdings, the largest holder of the company with about 10 per cent. The move comes just after Fairfax's boss Hyderabad-born Prem Watsa stepped down from the BlackBerry board as the company announced it would seek a sale. Watsa's resignation was widely viewed as a precursor to him making a bid.
Watsa, the man some call Canada's Warren Buffett, has earlier called BlackBerry was a "Canadian success story," a good buy and a likely turnaround story even though its market share was tumbling.
BlackBerry's fortunes have been in shambles with the company announcing it cutting over a third of its workforce as it retreats from the consumer market in favor of its traditional strength serving businesses and governments.
On Monday, BlackBerry said it agreed to be acquired by a consortium led by Fairfax for $4.7 billion, a move observers said could allow the company to put its house back in order out of the public eye.
Watsa, a die-hard admirer of billionaire Warren Buffett, says it is good to take a long term view that suggests it may be too early to assess his decision to buy into BlackBerry.
In present situation, BlackBerry has not flourished under Watsa's watch. BlackBerry's share price has taken a huge plunge, ever since Fairfax raised its stake in the company from a little more than 2% to just under 10%.
Watsa, born in 1950 in Hyderabad, India, and trained as a chemical engineer, is known to avoid the limelight ever since he took over Fairfax in 1985. For his first 15 years at the company, he barely spoke to a reporter, and he only started holding investor conference calls in 2001. However, he updates followers with long, detailed and folksy annual letters and makes pilgrimages to Nebraska for Mr. Buffett's annual investment carnival.
Watsa built his investing platform Fairfax from a trucking insurance firm, acquiring other property and casualty insurance firms over the years. He then began to broaden his investment portfolio, just like Mr. Buffett, who uses the core insurance operations of Berkshire Hathaway to fund investing activities.
Watsa's high-profile scores was a bet against rising U.S. housing process that registered more than $2 billion in gains.
