The struggling smartphone maker, BlackBerry abandoned its sale process on Monday, and announced it is going to replace its CEO, Thorsten Heins. After a two-month review of strategic options and talks with the potential buyers that include, Lenovo, Facebook and private equity firms like Cerberus, company said it is dropping the sale plans.
Thorsten Heins, the chief executive officer of BlackBerry, will soon leave the company. BlackBerry didn’t gave any reason for the change of the CEO. John Chen is going to serve as interim CEO and Fairfax’s head Prem Watsa will be appointed to the board of members.
Fairfax, BlackBerry’s largest share holder company with 10% stock in it, said that instead of purchasing BlackBerry and making it private, Fairfax along with some other investors will invest $1 billion in the company through debentures, which can be converted into common company shares with the price of $10 a share.
The only formal and tentative offer to buy BlackBerry came from Fairfax, which wanted to take the company private by offering $4.7 billion. But sources said that Fairfax’s boss Prem Watsa had trouble to finance this deal. Now the company will be offering a $250 million of debt to the Canadian smartphone maker.
The investment offering from Fairfax and some other investors will buy the company some time, which it badly needs. However, BlackBerry needs a new perfect strategy more than anything to regain its position in the smartphone market and that strategy must start really soon.