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Blackberry Ltd (BBRY): Prem Watsa’s Fairfax Increases Stake, Redeems Previous Debentures and Acquires Newly Issued Ones

A freshly-amended 13D filing with the Securities and Exchange Commission revealed that Prem Watsa‘s Fairfax Financial Holdings and some other institutional investors have signed a ‘Subscription Agreement’ with Blackberry Ltd (NASDAQ:BBRY). Under this agreement, Fairfax and other institutional investors shall invest in the company through a $605 million private placement of 3.75% unsecured convertible debentures convertible into shares of Blackberry at a price of $10 per share. The outstanding 6.00% unsecured subordinated convertible debentures of Blackberry that were previously issued (November 13, 2013, and January 16, 2014) on a private placement basis for an aggregate subscription price of $1.00 billion and $250.00 million respectively were redeemed. On September 7, under this agreement, Fairfax Financial Holdings obtained $500 million principal amount of the 3.75% debentures, which will be due November 13, 2020.

The filing also revealed that Fairfax Financial Holdings raised its stake in Blackberry (NASDAQ:BBRY) to 96.72 million common shares, which amass 16.9% of the company’s outstanding stock. Previously, the fund held some 50 million fewer shares, or 46.72 million common shares, plus 500 million principal amount of 6.00% debentures convertible, as per its 13F filing for the reporting period of June 30.

Blackberry is a multinational telecommunications and wireless equipment company widely known for its BlackBerry brand of smartphones and tablets. Its professional services and products contain BlackBerry Technology Solutions, Devices, Enterprise Solutions and Services, and Messaging. Over the past 12 months, the company’s stock is up by 2.71%. For the first quarter of its fiscal year 2017, Blackberry disclosed flat earnings per share, topping the estimates of a loss per share of $0.08, while its revenue of $424 million also topped the estimates of $377.06 million. Recently, Wells Fargo & Co. reiterated its ‘Positive’ rating on Blackberry’s stock with a price target of $7.62, while TD Securities reiterated its ‘Buy’ rating on the stock with a price target of $9, and JPMorgan Chase & Co. boosted its price target to $8.00 from $7.00 and has a ‘Neutral’ rating on it.

The number of hedge funds in our database (which includes 749 investors which filed 13Fs during the June quarter) long Blackberry (NASDAQ:BBRY) decreased by four in the second quarter, as at the end of June there were 20 smart money managers bullish on the stock. Among them were Jim Simons’ Renaissance Technologies, which held a position valued at $107.11 million, Francis Chou’s Chou Associates Management, with a position worth around $3.55 million, Ken Griffin’s Citadel Investment Group, George Hall’s Clinton Group, and Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners.

Some of the investors that dumped Blackberry (NASDAQ:BBRY) during the quarter encompassed Solomon Kumin’s Folger Hill Asset Management, which sold off its position worth around $1.04 million at the end of March, William Charters and Mario Marcon’s Sabal Capital Management, which said goodbye to $971,000 worth of Blackberry’s shares, Matthew Tewksbury’s Stevens Capital Management, and Sheetal Duggal’s Thrax Management.

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
V. PREM WATSA 8 96,724,700 10 96,724,700 96,724,700 16.9%
1109519 ONTARIO LIMITED 8 96,724,700 10 96,724,700 96,724,700 16.9%
THE SIXTY TWO INVESTMENT COMPANY LIMITED 8 96,724,700 10 96,724,700 96,724,700 16.9%
810679 ONTARIO LIMITED 8 96,724,700 10 96,724,700 96,724,700 16.9%
FAIRFAX FINANCIAL HOLDINGS LIMITED 8 96,724,700 10 96,724,700 96,724,700 16.9%
FFHL GROUP LTD 8 84,812,700 10 84,812,700 84,812,700 14.8%
ADVENT CAPITAL (HOLDINGS) LTD 8 2,660,000 10 2,660,000 2,660,000 0.5%
ADVENT CAPITAL (NO 8 2,660,000 10 2,660,000 2,660,000 0.5%
CRC REINSURANCE LIMITED 8 3,594,100 10 3,594,100 3,594,100 0.6%
FAIRFAX (US) INC 8 60,119,300 10 60,119,300 60,119,300 10.5%
CLEARWATER INSURANCE COMPANY 8 4,513,649 10 4,513,649 4,513,649 0.8%
ZENITH NATIONAL INSURANCE CORP 8 4,597,500 10 4,597,500 4,597,500 0.8%
ZENITH INSURANCE COMPANY 8 4,597,500 10 4,597,500 4,597,500 0.8%
TIG HOLDINGS, INC 8 7,373,500 10 7,373,500 7,373,500 1.3%
TIG INSURANCE COMPANY 8 7,373,500 10 7,373,500 7,373,500 1.3%
ODYSSEY US HOLDINGS INC 8 32,771,400 10 32,771,400 32,771,400 5.7%
ODYSSEY RE HOLDINGS CORP 8 32,771,400 10 32,771,400 32,771,400 5.7%
ODYSSEY REINSURANCE COMPANY 8 17,936,644 10 17,936,644 17,936,644 3.1%
HUDSON INSURANCE COMPANY 8 1,684,000 10 1,684,000 1,684,000 0.3%
NEWLINE HOLDINGS UK LIMITED 8 1,554,457 10 1,554,457 1,554,457 0.3%
NEWLINE INSURANCE COMPANY LIMITED 8 102,880 10 102,880 102,880 0.0%
NEWLINE CORPORATE NAME LIMITED 8 1,451,577 10 1,451,577 1,451,577 0.3%
CLEARWATER SELECT INSURANCE COMPANY 8 1,000,000 10 1,000,000 1,000,000 0.2%
CRUM FORSTER HOLDINGS CORP 8 10,863,251 10 10,863,251 10,863,251 1.9%
UNITED STATES FIRE INSURANCE COMPANY 8 10,863,251 10 10,863,251 10,863,251 1.9%
THE NORTH RIVER INSURANCE COMPANY 8 3,950,000 10 3,950,000 3,950,000 0.7%
RIVERSTONE HOLDINGS LIMITED 8 2,000,000 10 2,000,000 2,000,000 0.3%
RIVERSTONE INSURANCE LIMITED 8 2,000,000 10 2,000,000 2,000,000 0.3%
NORTHBRIDGE FINANCIAL CORPORATION 8 15,480,000 10 15,480,000 15,480,000 2.7%
FEDERATED INSURANCE COMPANY OF CANADA 8 1,911,800 10 1,911,800 1,911,800 0.3%
NORTHBRIDGE COMMERCIAL INSURANCE CORPORATION 8 1,509,800 10 1,509,800 1,509,800 0.3%
NORTHBRIDGE GENERAL INSURANCE CORPORATION 8 12,058,400 10 12,058,400 12,058,400 2.1%
NORTHBRIDGE PERSONAL INSURANCE CORPORATION 8 1,205,600 10 1,205,600 1,205,600 0.2%
ZENITH INSURANCE COMPANY 8 297,700 10 297,700 297,700 0.1%
BRIT LIMITED 8 7,213,400 10 7,213,400 7,213,400 1.3%
BRIT INSURANCE HOLDINGS LIMITED 8 7,213,400 10 7,213,400 7,213,400 1.3%
BRIT UW LIMITED 8 3,469,267 10 3,469,267 3,469,267 0.6%
BRIT INSURANCE (GIBRALTAR) PCC LIMITED 8 1,786,000 10 1,786,000 1,786,000 0.3%
BRIT SYNDICATES LIMITED 8 1,958,133 10 1,958,133 1,958,133 0.3%

Page 1 of 159 – SEC Filing


Page 2 of 159 – SEC Filing

CUSIP No. 09228F103

1

window.IC_ADS = window.IC_ADS || []; IC_ADS.push({ id: "top-left-google-ad-473520", type: "google-body", page: "finance", isMobile: "1" });

Names of Reporting Person/I.R.S. Identification Nos. of Above Persons (Entities Only)

V. PREM WATSA

2

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3

SEC Use Only

4

Source of Funds
OO

5

Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e). o

6

Citizenship or Place of Organization
CANADIAN

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power

8

Shared Voting Power
96,724,700

9

Sole Dispositive Power

10

Shared Dispositive Power
96,724,700

11

Aggregate Amount Beneficially Owned by Each Reporting Person
96,724,700

12

Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares o

13

Percent of Class Represented by Amount in Row (11)
16.9%

14

Type of Reporting Person
IN

2


Page 3 of 159 – SEC Filing

CUSIP No. 09228F103

1

window.IC_ADS = window.IC_ADS || []; IC_ADS.push({ id: "top-left-google-ad-473520", type: "google-body", page: "finance", isMobile: "1" });

Names of Reporting Person/I.R.S. Identification Nos. of Above Persons (Entities Only)

1109519 ONTARIO LIMITED

2

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3

SEC Use Only

4

Source of Funds
OO

5

Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e). o

6

Citizenship or Place of Organization
ONTARIO, CANADA

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power

8

Shared Voting Power
96,724,700

9

Sole Dispositive...


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