Prem Watsa remains confident despite major US carrier dumping BlackBerry and conference call cancellation
Thursday, September 26, 2013/
Investment tycoon Prem Watsa has expressed confidence in his recently announced $US4.7 billion takeover bid for Blackberry going ahead, as the company cancelled an earnings conference call and its smartphones have been dumped by a major US carrier.
In a statement, the Waterloo, Ontario-based smartphone maker announced that it will not host a previously announced earnings call and webcast after it delivers its second quarter earnings on Friday, Canadian time.
The company has already pre-announced it expects losses of nearly $US1 billion for the quarter, has nearly $US1 billion in unsold Z10 smartphone inventories and is laying off 40% of its worldwide workforce.
The news comes as Reuters reports a major US carrier, T-Mobile, will no longer stock the company’s smartphones in its stores, with the carrier instead shipping the devices from a central warehouse as customers place orders.
“Keeping [BlackBerry] stock in the retail distribution system was inefficient … therefore we will display and sell it in the store for those consumers who would like to see one,” said T-Mobile executive vice president for corporate services David Carey.
Despite the setback, Watsa remains confident of the prospects of a potential BlackBerry takeover deal during a recent interview.
“We wouldn’t put our name to such a high-profile deal if we didn’t feel confident that at the end of the day our due diligence would be fine and we’d be able to finance it,” Watsa said.
“BlackBerry is one of Canada’s great success stories. There is no question it’s fallen on hard times recently, but we have every confidence it will be successful again. We’re putting a consortium together to make sure that that takes place.”
Meanwhile, The Record reports that a number of Canadian pension funds, reported to include the Ontario Teachers’ Pension Plan and the Alberta Investment Management Corp (AIMCo), which manage a combined total of around $US198 billion in assets, have held preliminary talks with Watsa’s Fairfax Financial Holdings.
According to the report, the pension funds aren’t interested in backing a full takeover of BlackBerry, however are interested in purchasing key assets including its BIS secure server network and other key assets.
As SmartCompany previously reported, Canadian pension funds have been linked with any potential deal for Blackberry even before an official deal was signed.