This article has been updated to include a press release from Blackberry.
This weekend was a rollercoaster for Blackberry as it closed in on a deal with Fairfax Financial, which wrote a letter of intent in September to acquire the struggling mobile company at $9 per share for a total of $4.7 billion. But the Globe and Mail reports that Blackberry has abandoned the deal entirely, and CEO Thorston Heins is now out the door.
Fairfax had until today to finish its detailed examination of Blackberry’s financials, for a close on the acquisition sometime this week, but there was high skepticism that the plan would even take shape. Now, without a deal on the table, Blackberry has instead $1 billion in new funding to keep the lights on. An acquisition, it seems, isn’t going to be happening in the immediate future.
Heins’ departure, which will reportedly be accompanied by a jettison of some board members, marks the end of a woeful stint as CEO. After taking the reins from Mike Lazaridis and Jim Balsillie, Heins oversaw the transition of RIM to Blackberry and doubled down on the company’s smartphone offerings, only to oversee a $1 billion loss due to sputtering sales. The company’s recent release of BBM for iPhone and Android has been met with mixed reviews and a stuttering rollout that served as a hallmark for the company’s struggles to stay relevant.
According to Blackberry’s official statement, Fairfax as well as “other institutional investors” will furnish Blackberry through U.S. $1 billion private placement of convertible debentures. In the wake of the funding, both Heins and David Kerr will resign from the board. John S. Chen will take over as both Executive Chair of BlackBerry’s Board of Directors and interim CEO.
“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, in the statement.