- 2 years ago

Share

BlackBerry shares are down more than 12% in trading today following news that Fairfax Financial’s $4.6 billion takeover of the Waterloo-based company collapsed.

Chief executive officer Thorsten Heins has stepped down from his role. He will be replaced by John Chen on the interim. Chen will also serve as executive chair of BlackBerry’s board of directors. Fairfax head Prem Watsa will be appointed lead director and chair of the the Compensation, Nomination and Governance Committee. Heins intends to resign from the board.

Instead of selling, BlackBerry raised $1 billion from Fairfax and its consortium of institutional investors by selling convertible notes. The transaction is expected to close within two weeks.

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” said Barbara Stymiest, Chair of BlackBerry’s Board. “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.”

“Fairfax is a long-time supporter, investor and partner to BlackBerry and, with this investment, reinforces its deep commitment to the future success of this company,” said Watsa. “I look forward to rejoining the BlackBerry Board and to working with the other directors and management team, under John Chen’s leadership, to shape the next stage of BlackBerry’s strategy and growth.”

“I am pleased to join a company with as much potential as BlackBerry,” noted Chen. “BlackBerry is an iconic brand with enormous potential—but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”

Chen previously served as the chairman and CEO of Sybase Inc., beginning in 1998.

Photo: Reuters