BlackBerry privatization bid fails, Thorsten Heins out as CEO
About six weeks ago, the news came down that troubled Canadian company BlackBerry had agreed to a $4.7 billion deal from Fairfax Financial which would make the company private once again. The move would mean the company could work on rebuilding its lost market share outside of public scrutiny, but that deal never completely ended the rumors that BlackBerry was looking to sell the company, even in part.
But, today's deadline for Fairfax Financial to officially put in a bid has passed because apparently Fairfax couldn't find the partners necessary to finalize the deal; and, now we're learning that the plans are changing. It turns out that rather than purchase the failing company stock to privatize, Fairfax is going to lead a group of investors which will supply BlackBerry with a $1 billion investment. Fairfax will supply $250 million of the investment, which will come in the form of a debt sale.
Also part of the new plan is to remove Thorsten Heins as CEO and make some changes to the BlackBerry board of directors. Heins has only been CEO since the beginning of 2012, and his time has not inspired confidence even with the launch of BlackBerry 10. The $1 billion investment should be completed within the next two weeks at which point Heins will be out and John Chen will take over as interim CEO and executive chairman of the board. Current BlackBerry chair Barbara Stymiest said of the new plan:
Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, 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 favorable 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.