BlackBerry Abandons Sale Effort, Ousts CEO Thorsten Heins

Blackberry CEO Thorsten Heins
Mario Tama/Getty Images

Sale of convertible debt comes four months after troubled wireless firm went on block

BlackBerry is doing an about-face on its plan to find a buyer and has ousted CEO Thorsten Heins after less than two years on the job.

The trouble wireless devices and services firm disclosed Monday that it will receive a $1 billion injection from investor Fairfax Financial Holdings, which had been in talks to acquire the firm for about $4.7 billion, and other investors. Fairfax is putting $250 million into the deal.

The $1 billion sale of convertible debt will convert into equity after seven years a share price of $10, which would translate to 16% of the company. The investors have an option to invest another $250 million within 30 days, which would boost the potential conversation to 19.2% of outstanding shares.

Deal is expected to close within two weeks, after with Heins (pictured) will step down as CEO. John Chen, former CEO of Sybase, will become exec chairman of the BlackBerry board and serve as interim CEO until a successor is found. Fairfax chairman Prem Watsa will become lead director and head of its governance and compensation committee.

BlackBerry’s woes have mounted in recent years as competition in the smartphone space has heightened. The company put itself on the block in August. Canuck insurance giant Fairfax was said to have had trouble raising the financing for an outright acquisition.

“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, BlackBerry’s chairman.

“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,” she said.

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  1. Frank W says:

    I actually miss my Blackberry Storm II. Finally cracked the screen after many falls (landed on the corner edge) but it still worked until the battery failed. Got some replacements, but I had moved on to the Google Phone but it wasn’t as “elegant” in messaging in one place as the BB was.

  2. Good luck to all of you @ Blackberry…

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