Quantcast

BlackBerry Calls Off Sale, Replaces Thorsten Heins to Raise $1 Billion Investment

blackberry-l-series.jpg

BlackBerry took a U-turn today: after two and a half months seeking a buyer, it has dropped this plan and decided instead to oust its CEO Thorsten Heins and some directors, and raise $1 billion of new funds, the Globe and Mail reports.

The struggling Canadian smartphone maker has received a letter of intent from investor FairFax Financial Holdings Ltd. to acquire the company for $4.7 billion, or $9 per share. The company’s largest shareholder has time until today to go through BlackBerry’s books and finalize the bid.

Investors have feared that FairFax hasn’t raised the money until today for the initial $4.7 billion bid, but now it all becomes obvious: there was no need to raise money because the two parties have agreed that FairFax and other institutional investors will invest another $1 billion in BlackBerry to help the company reclaim its success.

As a first step of the agreement signed between BlackBerry and FairFax, Thorstein Heins and David Kerr need to leave the company within two weeks. FairFax has agreed to acquire $250 million principal amount of Deventures, a transaction that will complete 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. 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,” the company wrote in a press release.

Thorsten Heins will be replaced by John S. Chen, former CEO of Sybase Inc., who will be responsible for BlackBerry’s strategic direction, strategic relationships, and organizational goals.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • B

    Interesting !

  • 1His_Nibs1

    Hmmm…..I wonder if the release and subsequent massive downloading of BBM for iPhone/Android had anything to do with this? Delusional optimism maybe?

  • FragilityG4

    Circle the drain …..

  • kkritsilas

    Stick a fork in it, Blackberry/RIM is done. Split off and terminate the HW side, and either try to operate the software side (by opening it up to multiple platforms) and patent enforcement, or sell of the patents and kill the entire company.

    I personally never liked Thorsten Heins in any way, but I don’t really think he was in any position to improve things, from day one. I think he may have realized this from the start, but took the job anyway.

    I, as a former employee of Nortel, am sad to see another Canadian tech giant go under, but the toxic twins (Lazaridis and Ballsilie) chose to stick their heads in the sand when the original iPhone came out in 2007. If they had recognized the iPhone for the sea change it was bringing to the cell phone market, they may have chosen to respond far more quickly. If the Z10/Q10/Z30/Q5 were out in 2009/2010, they may have had a chance. But coming out in 2013? Far too little, and way, way, way too late.

    Kostas

  • nightfly

    Can we say “CLUSTER F**k!” Blackberry is done like toast and in this case it is burnt toast. They will not pull a trick out of the hate like Apple did in the late 90’s and make the big come back. This is a company that lack leadership and vison. They can not even stick with a game plan for more six months and now they even found a way to screw up the sale of the company.