Lack of M&A Options Puts BlackBerry's (BBRY) Back Against the Wall
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BlackBerry (Nasdaq: BBRY) has a catch 22 scenario when it comes to finding a potential buyer.
Last week, BlackBerry and Fairfax Financial Holdings entered a letter of intent (LOI) for Fairfax to acquire BlackBerry at $9 per share. Nothing about the agreement was binding and BlackBerry agreed to pay a rather hefty fee if the deal didn't go through, to the tune of $157 million.
The agreement might deter other companies looking at BlackBerry and its assets, notes Bloomberg on Monday. Paying a fee without a definitive agreement is virtually
While Fairfax would get 30 cents per share on termination of the deal, the firm won't need to pay BlackBerry one shiny dime if it decides to back out. That fee moves up to 50 cents per share if the two parties enter a definitive agreement, or about $262 million.
The larger fee represents about 5.6 percent of the deal value, versus 3.5 percent for U.S. companies in 2012.
For more on the deal, click here. Shares of BlackBerry are down in early trading.
Last week, BlackBerry and Fairfax Financial Holdings entered a letter of intent (LOI) for Fairfax to acquire BlackBerry at $9 per share. Nothing about the agreement was binding and BlackBerry agreed to pay a rather hefty fee if the deal didn't go through, to the tune of $157 million.
The agreement might deter other companies looking at BlackBerry and its assets, notes Bloomberg on Monday. Paying a fee without a definitive agreement is virtually
unheard of,according to one Deutsche Bank analyst.
While Fairfax would get 30 cents per share on termination of the deal, the firm won't need to pay BlackBerry one shiny dime if it decides to back out. That fee moves up to 50 cents per share if the two parties enter a definitive agreement, or about $262 million.
The larger fee represents about 5.6 percent of the deal value, versus 3.5 percent for U.S. companies in 2012.
For more on the deal, click here. Shares of BlackBerry are down in early trading.
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