Blackberry announced that it has agreed with Fairfax and other investors to raise $1billion instead of seeking for buyers. This has put to and end the deal that Fairfax was going to buy the company for $4.7 billion.
In the press release announcing this change in position, Blackberry also announced that it was replacing its CEO, Thorsten Heins with John S. Chen. Upon the closing of the transaction, John S. Chen will be appointed Executive Chair of BlackBerry’s Board of Directors and, in that role, will be responsible for the strategic direction, strategic relationships and organizational goals of BlackBerry.
Today’s announcement marks the conclusion of the review of strategic alternatives previously announced on August 12, 2013.
According to the chair of its board of directors, Barbara Stymiest, also to be replaced in this shuffle, “I am also pleased that John Chen, a distinguished and proven leader in the technology industry, has agreed to serve as BlackBerry’s Executive Chairman. I look forward to continuing to serve BlackBerry as a member of its Board of Directors and chair of the Board’s Audit and Risk Management Committee. On behalf of the Board, I would also like to thank Thorsten for his service to BlackBerry over the past six years. Under his leadership, BlackBerry established a more efficient cost structure, developed new products, saw the adoption of BES 10 and delivered the BlackBerry 10 platform. These are all significant accomplishments. We are grateful for his contributions and wish him well in his future endeavors.”
Mr Chen replied by saying “I am pleased to join a company with as much potential as BlackBerry.” “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”
The news sent BlackBerry shares plunging to their lowest level in years, dropping $1.32 or 16.4 per cent to C$6.76 on the Toronto Stock Exchange and $1.17 to US$6.60 on Nasdaq.
