Fairfax hopes to sidestep oversight on BlackBerry deal
CEO highlights company’s Canadian status, dismisses competition concerns
The chief executive of Fairfax Financial Holdings is seeking to sidestep regulatory approval of his company's $4.7bn takeover of troubled Canadian smartphone maker BlackBerry, Reuters reported.
Fairfax Financial's $9-a-share proposal was announced on Monday. It is funded by a consortium that is led by Fairfax and while the other financiers remain anonymous, analysts believe they include a number of Canadian pension funds. The group plans to take BlackBerry private after a five-year decline in its industry standing.
Canadian regulators have the right of oversight on any takeover of a domestic business that could threaten either market competition or national security. Fairfax CEO Prem Watsa, often hailed as Canada's Warren Buffet, wrote to BlackBerry, highlighting the fact that his company was Canadian and dismissing concerns about anti-competitiveness.
"Our proposal offers a high level of certainty of regulatory approval," he wrote.
On Monday Watsa told The Globe and Mail newspaper that the majority of finance for the buyout would come from Canada.
Any move by a foreign-owned company to make a bid for BlackBerry would likely meet with resistance. Early contenders included China-based Lenovo Corp, which has recently ramped up its own production of smartphones.
"The prospect of a Chinese firm taking over any part of BlackBerry would not be greeted with enthusiasm by this government," an unnamed Canadian government official said last month.