CEO Thorsten Heins departs as BlackBerry calls off sale to its largest shareholder
BlackBerry has abandoned plans to sell its business to its largest shareholder Fairfax Holdings for $4.7 billion (£2.95bn) and will instead raise $1 billion (£626m) in a new finance deal with a number of private institutions, including Fairfax.
Fairfax had until today to complete due diligence ahead of the transaction, while any other interested party was also required to register their interest ahead of this deadline. A number of companies, including Facebook, Lenovo and Qualcomm, have all been linked with bids.
Apparently, Fairfax was struggling to raise the necessary funds to complete the transaction; insteqad, it will now invest $250 million (£157m) as part of BlackBerry’s new financing deal, which the company says is a vote of confidence in the brand and is the conclusion of the review of strategic alternatives it announced in August.
BlackBerry sale abandoned
“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,” said Barbara Stymiest, Chair of BlackBerry’s Board. “This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position.”
BlackBerry has also revealed that CEO Thorsten Heins will step down from his position once the transaction is concluded, believed to be in the next two weeks, and will be replaced by Jack S.Chen, former chairman and CEO of Sybase, who will serve as interim chief executive until Heins’ replacement is found.
Chen will also be appointed executive chair of the BlackBerry board of directors, a role which will see him responsible for the strategic direction of the company. Prem Watsa, CEO of Fairfax will also be re-appointed to the board, having resigned over a potential conflict of interest when BlackBerry said it was considering a sale of the company.
Thorsten Heins to go
“On behalf of the Board, I would also like to thank Thorsten for his service to BlackBerry over the past six years,” adds Stymiest. “Under his leadership, BlackBerry established a more efficient cost structure, developed new products, saw the adoption of BES 10 and delivered the BlackBerry 10 platform. These are all significant accomplishments. We are grateful for his contributions and wish him well in his future endeavours.”
BlackBerry was once widely considered the market leader in enterprise smartphones, but has seen its share eroded by the likes of Apple and Samsung devices which can offer many of the same security and administration features.
In September, it posted a massive £600 million loss, and has embarked on a programme of job cuts and restructuring as it seeks to downsize its operations and focus on the businesses rather than consumers.
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