Fairfax Financial CEO Prem Watsa.(Photo: Frank Gunn, AP)Story HighlightsFairfax Holdings walks away from $4.7 billion takeover proposalBut insurance company to invest $1 billion in BlackBerry
The odd thing about the news that Toronto insurance company Fairfax Holdings won’t buy BlackBerry in a $4.7 billion takeover isn’t that Fairfax came to its senses about buying a company losing both money and market share.
The perplexing part is the investment deal the two companies are doing instead.
Fairfax, already BlackBerry’s largest shareholder, is investing another $1 billion in exchange for debt that can be converted into another 16% ownership interest in BlackBerry — at a price of $10 a share, Since BlackBerry closed Friday at $7.77, and fell to $6.50 in early trading Monday, that’s a bet that’s likely to be out of the money for a while, maybe forever.
Read also:
BlackBerry Abandons Effort to Sell Itself (New York Times)
BlackBerry calls off sale, will replace CEO (Reuters)
BlackBerry shocker: Buyout deal falls apart; Heins out as CEO (Los Angeles Times)
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