It looks like Fairfax Financial Holdings may get some competition as it attempts to take BlackBerry private in a $4.7 billion deal, with reports emerging Wednesday that Cerberus Capital Management LP may launch a bid of its own.
According to a report from The Wall Street Journal, citing sources familiar with the matter, Cerberus has expressed interest and is looking to sign a confidentiality agreement to gain access to private financial information from BlackBerry. It doesn’t mean Cerberus will launch a rival bid, but it would gain access to information to help it judge the state of the company and decide whether or not to make a bid.
Neither BlackBerry or Cerberus have confirmed the report. In a statement provided to Reuters, BlackBerry declined comment.
“We do not intend to disclose further developments with the respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives,” a BlackBerry spokesman told Reuters.
The Fairfax offer, which is only a letter of intent that could be withdrawn after its own due diligence is completed, values BlackBerry at $9 a share. BlackBerry stock was still trading below that level on the TSX in afternoon trading Wednesday, although it was up by 1.10 per cent to $8.28 on the strength of the Cerberus report.
It’s not uncommon for companies, even rivals, to sniff around a company during a go-shop period, and sign a confidentiality agreement to gain access to private financials. During Dell’s go-private process, rivals HP and Lenovo took advantage of the go-shop period to get access to Dell’s books. Its unlikely either had serious designs on bidding for the company; they just wanted a peek under the curtain.
It will remain to be seen how serious Cerberus is, or what its intentions for BlackBerry would be should it launch a successful bid. Based in New York City, Cerberus specializes in distressed assets. Its leadership team includes former U.S. vice-president Dan Quayle. Its web site does not currently list any Canadian portfolio companies.