BlackBerry abandons sale
BlackBerry has called off its sale plans and yesterday announced that its CEO, Thorsten Heins, would be stepping down.
The mobile handset company had provisionally agreed to a $4.7 billion takeover by Fairfax Financial Holdings last month, but Fairfax – BlackBerry’s largest shareholder – will now invest an additional $1 billion in the company.
Monday was the deadline for a firm bid and BlackBerry’s decision not to sell has come up against criticism from other prospective bidders, who have reportedly called the process “a farce”.
One such contender was a group comprising US private equity fund Cerberus Capital Management and BlackBerry founders, Mike Lazaridis and Doug Fregin. A source close to the group told the Financial Times that they had received no warning of the decision.
Another source connected to a different potential buyer told reporters: “Obviously BlackBerry’s preference is not to sell itself, but it has to listen to what the market is saying. Those parties that were interested are still going to be keeping close tabs on it; the logic for buying hasn’t gone, but the company hasn’t given any guidance on what it is going to do next.”
Barbara Stymiest, non-executive chairman of the board at BlackBerry, claims that the plan to receive financing from Fairfax was in the company’s best interest.
"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," Stymiest said in a statement.
"This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position."
Following the cancelled sale, Heins – who was appointed CEO of BlackBerry in January 2012 – will be replaced by technology veteran John Chen, who leaves his positions at mobile software firm Sybase for the role.
BlackBerry director David Kerr will also step down from the board and Prem Watsa, chairman of Fairfax, is to rejoin the board after leaving in August.
Shares in BlackBerry fell 16.4% to $6.49 per share following the news.