BlackBerry reverses course, cancels sale, mutinies on CEO

BlackBerry logoThe effort to take BlackBerry private has collapsed, and the failure has taken CEO Thorsten Heins with it. BlackBerry announced this morning that it has cancelled efforts to sell the company and will now instead take on $1 billion in debt—much of it from the firm that was seeking to buy it.

The boardroom coup came as Fairfax, the private equity firm that had tendered a tentative $4.7 billion bid for BlackBerry, ran into trouble in financing the deal. Instead, Fairfax and a group of other institutional investors will buy $1 billion in debt in BlackBerry, which will be convertible to shares in the company.

In a press release, Blackberry board chair Barbara Stymiest said:

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.

BlackBerry also announced the appointment of John Chen as the company's new executive chairman and interim CEO. Chen, the former chairman and CEO of the database software company Sybase—another former Ontario tech giant—is now a director at Wells Fargo and senior advisor at Silver Lake Partners, the private equity firm that partnered with Michael Dell in his successful bid to take Dell private.

Heins will resign his position as CEO by the end of the day today, and he and company director David Kerr will also resign from the board.

Source: Ars Technica

Tags: BlackBerry

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