BlackBerry Update: Fairfax, CEO Out as Company Continues to Reshape
BlackBerry (NASDAQ: BBRY) shareholders woke up on Monday morning to yet another bombshell news report. Fairfax Financial has abandoned its plans to take the Canadian smartphone maker private. Meanwhile, the company's CEO will be stepping down from his post.
Fairfax produced a letter on September 23 of intent to place a $4.7 billion bid for BlackBerry, which came out to a $9 per share deal. Fairfax had six weeks to examine its offer in greater detail, while BlackBerry could seek additional buyers to present bids.
The six-week period ended Monday, as the “Canadian Warren Buffet” CEO of Fairfax, Prem Watsa, decided to walk away from the deal, leaving BlackBerry with one less lifeline.
BlackBerry announced that it intends to raise around $1 billion from institutional investors, including Fairfax.
Perhaps one of the biggest losers in this BlackBerry fiasco is ousted CEO Thorstein Heins. The former CEO was set to receive $25 million as a result of a successful Fairfax bid. Heins resignation is in part intended to “represent a significant vote of confidence in BlackBerry and its future,” according to the board of directors.
This comes after the board “conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interest of BlackBerry and its constituents, including its shareholders.”
John Chen will step up to the plate as the company's new CEO. Chen is a veteran of the technology industry with an impressive resume that includes selling Sybase to SAP AG, while currently holding board seats at Walt Disney (NYSE: DIS) and Wells Fargo (NYSE: WFC).
BlackBerry executives came knocking on Facebook (NASDAQ: FB)'s door within the last week, presenting themselves as up for grabs. Facebook has shown a desire to succeed in the mobile market, but there is little news to indicate that Facebook is interested in acquiring BlackBerry.
Given these recent setbacks, it is not surprising that shares of BlackBerry have hit a new 52-week low of $6.40 in early Monday morning trading.
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