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Fairfax Recovers From BlackBerry, Buys The Keg

Stocks in this article: BBRY

Fairfax Financial Holdings Ltd (FFH) is on the rebound. The company, which is headed by legendary Canadian investor Prem Watsa, recently failed in its bid to bring BlackBerry Ltd (BBRY) (BB) private, but it’s getting right back on the horse. According to reports released today the company has acquired a 51% stake in the Keg restaurant group.

The Keg is a Canadian restaurant group that operates in that country and the United States. Fairfax Financial Holdings Ltd (FFH) acquired a stake in the Keg Restaurants Ltd. The group operates some of the restaurants under the brand. Fairfax now owns a 51% stake in the company, with the remaining 49% staying with the founder of The Keg, David Aisenstat.

Fairfax moves into The Keg

An investment from Fairfax Financial Holdings Ltd (FFH) often provides a boost for a company. The investment firm is no stranger to a value approach, and it is familiar with the day-to-day running of a business. Prem Watsa’s presence gives a company a stamp of approval and offers it some of the best advice out there.

According to the terms of the Keg deal, David Aisenstat will retain his position at the head of the company. He owned the entirety of Keg Restaurants Ltd before Fairfax Financial holdings Ltd (FFH) bough in.

Fairfax betting on Blackberry

Despite its inability to take BlackBerry Ltd (BBRY) (BB) private, Fairfax Financial Holdings Ltd (FFH) has not abandoned the company. Fairfax chief Prem Watsa has joining the company’s board, and the firm spearheaded a $1 billion financing deal that BlackBerry announced alongside its decision to stay public.

Prem Watsa has exhibited a good deal of faith in BlackBerry Ltd (BBRY) (BB) in recent years, though it is unclear whether that faith has been warranted. The Canadian investor often sticks by Canadian companies, and Blackberry may be the most visible of them all. Its failure will hurt the wallet of Watsa, and those of Fairfax Financial shareholders, but it may hurt the fund manager’s pride more.

It’s clear that not all of Mr. Watsa’s time is being taken up by his efforts at BlackBerry Ltd (BBRY) (BB). The acquisition of 51% of Keg Restaurants Ltd. shows that though the most visible part of his recent investments may be in smartphones, the core of the business is not in danger form Watsa’s bet on BlackBerry Ltd (BBRY) (BB).

-By Paul Shea


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