TORONTO _ The beaten down shares of BlackBerry dropped another six per cent on Wednesday as investors weighed the likelihood of a highly conditional takeover offer from Fairfax Financial, one of BlackBerry's largest shareholders.
The smartphone maker pulled back 52 cents to $8.26 on the Toronto Stock Exchange, extending a downwards shift that gained momentum earlier this week.
The last time BlackBerry shares closed this low was on Oct. 31, when it ended at $7.88.
The decline of BlackBerry (TSX:BB) shares has escalated since Monday when Fairfax (TSX:FFH) proposed a tentative agreement to take the company private with a consortium of unnamed financiers for $9 per share.
The letter of intent values BlackBerry at US$4.7 billion, but allows Fairfax to walk away from the offer if it is dissatisfied with a number of conditions.
That tentative bid is gradually becoming a more attractive option as BlackBerry continues to lose value on stock markets. Since the announcement, when shares of the company briefly spiked, its stock has fallen nearly 11 per cent.
In New York, the company's stock lost more than six per cent to US$8 on Wednesday.
A report in the Globe and Mail says that Fairfax is seeking more than US$1 billion from other investors to help fund a takeover of BlackBerry.
The Globe, citing unidentified sources, said that as of Tuesday only one pension fund is seriously considering joining the Fairfax-led consortium _ the Ontario Teachers Pension Plan, one of Canada's largest institutional investors.
The pension plan has declined to comment on any reports that link it to deals before they're announced.
The Globe report says Fairfax is pitching a deal that would be financed with $3 billion of bank loans, $1 billion of equity from institutions and Fairfax's current 10 per cent stake in BlackBerry, worth about $470 million.
(c) 2013 The Canadian Press
Original headline: BlackBerry shares extend their decline on lacklustre response to takeover offer
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