Home' Trinidad and Tobago Guardian : September 27th 2013 Contents A26
Guardian www.guardian.co.tt Friday, September 27, 2013
TORONTO---The head of Fairfax
Financial Holdings Ltd says he
has every intention of completing
the acquisition of BlackBerry,
despite doubts that the US$4.7
billion deal for the troubled smart-
phone maker will go through.
BlackBerry announced earlier
this week that Fairfax signed a letter
of intent that "contemplates" buy-
ing BlackBerry for US$9 a share.
Fairfax, BlackBerry s largest share-
holder, is trying to attract other
BlackBerry shares on Wednesday
lost 6 per cent, closing a dollar
below Fairfax s bid on fears the deal
won t happen.
There is no breakup fee should
Fairfax walk away, but Fairfax Chief
Executive Prem Watsa told The
Associated Press his firm is not in
the business of making an offer
and then walking away or redoing
"We ve got a track record of 28
years of completing what we ve
done. We ve never re-negotiated,"
Watsa said. "We thought long and
hard before we offered US$9 dollars
a share and we re not in the busi-
ness of offering a number and at
the last minute changing the figure.
Over 28 years our reputation is
stellar on that front. We just don t
Watsa noted the deal is subject
to six weeks of due diligence but
stressed Fairfax won t abandon it.
Watsa stepped down as a board
member last month because of
potential conflicts when BlackBerry
announced it was considering a
sale. If the proposed deal goes
through, BlackBerry would go pri-
vate and no longer be traded pub-
Watsa said Fairfax won t be con-
tributing more to the bid than the
ten per cent it already owns.
"The ten per cent is like US$500
million. It s a significant amount
of money," he said. "We re going
to bring equity partners and we
think the company will be very
He declined to name the other
investors he is trying to bring in.
Fairfax s average cost per share
in acquiring BlackBerry shares is
US$17. The Canadian insurance
and investment firm has lost hun-
dreds of millions on BlackBerry.
Analysts say that although Black-
Berry s hardware business is not
worth anything, the company still
owns valuable patents. BlackBerry
is also strong in having total cash
and investments of about US$2.6
billion, with no debt, though it s
burning through that stockpile. In
just the past few months, it s spent
about half a billion dollars.
Watsa said Fairfax is not buying
BlackBerry to break it apart.
"Rest assured when we do this
it won t be done to split the com-
pany," Watsa said. "I mean one of
the reasons I went on the board,
and I said it publicly, was to keep
the company in Canada and to
make sure it survives and exists in
Canada. It is one of Canada s most
successful companies. Companies
do fall on hard times and they come
back again and we expect this com-
pany to do the same." (AP)
Fairfax Financial Chairman and CEO Prem Watsa speaks at the company's
annual general meeting in Toronto. AP PHOTO
Fairfax chief: I won't abandon BlackBerry bid
WASHINGTON---JPMorgan chief executive Jamie
Dimon met yesterday with Attorney General Eric
Holder about an investigation into the company s
handling of mortgage-backed securities in the run-
up to the recession.
A person familiar with the matter said Dimon was
at the department to meet with Holder. The person
was not authorised to speak on the record about the
matter and spoke on condition of anonymity.
An $11 billion national settlement is under review
to resolve claims against JPMorgan, according to a
government official familiar with ongoing negotiations
among bank, federal and New York state officials.
As he walked into the Justice Department yesterday,
Dimon declined to answer when asked about the
state of the discussions.
The Department of Justice is taking the lead on
the settlement, which would include $7 billion in
cash and $4 billion in consumer relief, said the official,
who spoke on condition of anonymity.
The government has continued investigating JPMor-
gan over mortgage-backed securities, which lost value
after a bubble in the housing market burst and helped
spur the financial crisis.
In January 2012, a task force of federal and state
law enforcement officials was established to pursue
wrongdoing with regard to mortgage securities.
In other cases, the Justice Department last month
accused Bank of America Corp of civil fraud in failing
to disclose risks and misleading investors in its sale
of $850 million in mortgage bonds in 2008. The
Securities and Exchange Commission filed a related
lawsuit. The government estimates that investors
lost more than $100 million on the deal. Bank of
America is disputing the allegations.
Last week, JPMorgan agreed to pay $920 million
and admitted that it failed to oversee trading that
led to a $6 billion loss last year. That combined
amount, in settlements with three US regulators and
a British one, is one of the largest fines ever levied
against a financial institution.
JPMorgan came through the financial crisis in
better shape than most of its rivals, and CEO Dimon
had charmed lawmakers and commanded the atten-
tion of regulators in Washington.
A number of big banks, including JPMorgan, Gold-
man Sachs and Citigroup, previously have been
accused of abuses in sales of securities linked to
mortgages in the run-up to the crisis. Together they
have paid hundreds of millions of dollars in penalties
to settle civil charges brought by the SEC, which
accused them of deceiving investors about the quality
of the bonds they sold. (AP)
Attorney General meets
with JPMorgan chief
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