Prem Watsa, the largest shareholder of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) might acquire the entire company, despite reports that some of the initial interested buyers are looking to buy parts of the beleaguered Canadian smartphone manufacturer.
Reuters reported that several private equity firms signed a confidentiality agreement with the management of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), and are interested in the operating system and patents of the smartphone manufacturer.
Prem Watsa’s large investment
On the other hand, Prem Watsa’s Fairfax Financial Holdings Ltd (TSE:FFH) (OTCMKTS:FRFHF) took some of the large investment funds in Canada to form a buyer group to acquire BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). Prem Watsa immediately resigned from the board of the smartphone manufacturer after its decision to explore alternative strategies to prevent a conflict of interest.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
The Sunday Times recently reported that Prem Watsa is close to reaching a deal to save BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), as he was able to form a group of buyers willing to invest billions to acquire the smartphone manufacturer.
BlackBerry’s fate in Watsa’s hands
Some people in the technology industry believe that the fate of the Canadian smartphone manufacturer may be in the hands of Watsa. Last month, Richard Steinberg, International Chair of Fasken Martineau’s Securities and Mergers & Acquisitions Mergers Group, commented that Prem Watsa’s support for any buyout deal is critical given the fact that his firm, Fairfax Financial Holdings Ltd (TSE:FFH) (OTCMKTS:FRFHF) owns a 10 percent stake in BlackBerry. He said, “I would imagine that if Fairfax says they are against a particular deal; that would carry a lot of weight.”
Peter Misek, managing director of investment banking firm Jefferies, previously stated that the crown jewel of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) that could attract investors is its Enterprise Business.
According to Misek, the networks of the Canadian smartphone manufacturer are among the few that cannot be hacked by the United States National Security Agency (NSA). He emphasized that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s custom cryptography is NSA proof. Based on his conversations with the agency, it failed to circumvent the company’s security measures to protect data.
“We think it’s NSA-proof. It’s probably one of the only networks that is, and the security is so good, it takes four million years on brute compute force to hack it, so we think it’s a very valuable asset,” said Misek.