Investment guru key to BlackBerry deal, Canada Pension Plan Board considers bid

Fairfax Financial Holdings founder Prem Watsa holds the keys to any BlackBerry deal, with Canada Pension prepared to consider a bid to take the company private, according to reports.

On Tuesday, SmartCompany reported the embattled smartphone maker announced the creation of a special five-member board to examine sale options, on the same day Watsa resigned from the board of directors.

Watsa’s Fairfax Financial Holdings – not related to the Australian media company – is the largest individual shareholder in the company, having purchased a 9.9% stake in the company for $880 million.

According to Reuters, the large shareholding places the Indian-born chemical engineer turned investment guru in a key position to decide the success of any potential bid.

“I would imagine that if Fairfax says they are against a particular deal, that would carry a lot of weight, beyond just the 10% they control,” said Richard Steinberg, the head of Fasken Martineau’s securities and mergers and acquisitions group in Toronto.

Aside from being a key shareholder, according to The Guardian, Watsa is also emerging as a leading potential bidder for the company.

“Hearing the announcement from BlackBerry accompanied by Prem’s departure from the board should indicate something will happen this time on the strategic front,” Todd Johnson, from Winnipeg-based BCV Financial, told The Guardian.

“We have a lot of respect for the investment acumen and long-term track record Prem Watsa has established at Fairfax.”

Meanwhile, according to Bloomberg, the Canada Pension Plan Investment Board’s chief executive officer, Mark Wiseman, has said it will consider investing in any bids to take the company private.

“It’s safe to say that any large deal in Canada or elsewhere is something that we would make sure we took a hard look at,” Wiseman told Bloomberg. “You could say that about that asset.”

Meanwhile, Bloomberg reports, bankers from JPMorgan Chase & Co. (JPM) and RBC Capital Markets have contacted a range of potential investors, including private equity firms and competitors, and have found little interest in the firm.

As SmartCompany reported in June last year, the two banks had been conducting a strategic review of the company, with Blackberry chief executive Thorsten Heins conceding the company was up for sale during an interview in January of this year.

“There are several options, including the sale of the hardware production is as much as licensing our software” Heins said at the time.

“But there is no reason for us to decide in haste. It is important, first of all, to successfully put BlackBerry 10 on the market. Then we shall see.”