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Well, there goes that potential acquisition… and the CEO. Embattled smartphone giant BlackBerry announced today that its buyout plans with shareholder Fairfax Financial Holdings had fallen through, after the agreed upon deadline expired.
Instead of its proposed US$4.7-billion acquisition plan, BlackBerry will be looking to raise US$1-billion in funding through the placement of convertible debentures — US$250 000 of which will come from Fairfax. In addition to that, Thorsten Heins will resign both from his seat on BlackBerry’s board and as CEO once the deal is finalised in around two weeks.
Former chairman and CEO of enterprise software and services company Sybase, John S. Chen, will take over his role in formulating the future strategic direction BlackBerry will take in future, and will be appointed Executive Chair of the smartphone maker’s board of directors and interim CEO. Prem Watsa, chairman and CEO of Fairfax, will be appointed lead director and chair of the compensation, nomination and governance committee at the same time.
In a statement, Barbara Stymiest, chair of BlackBerry’s board, said that the announcement “represents a significant vote of confidence in BlackBerry and its future by this group of pre-eminent, long-term investors”.
“The BlackBerry board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders. This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.”
While BlackBerry was undergoing strategic review and the Fairfax acquisition was announced with the firm disclaimer that it would go through after “due diligence”, it’s another twist in the tale of the convalescent titan which has recently been plagued by poor sales of its BlackBerry 10 devices and the problematic roll out of BBM for Android and iPhone.