Canadian smartphone maker Blackberry continues its decline today as its hopes to find a buyer for the company have completely fallen flat. Blackberry did have a letter of intent for a sale from its biggest shareholder Fairfax Financial, but it ultimately decided not to go ahead with the purchase, leaving Blackberry without any other suitors. Fairfax has, however, structured a loan for Blackberry. In the meantime, the company has subsequently fired its CEO, Thorsten Heins. As reported by forbes.com:
“Thorsten Heins, the chief executive of BlackBerry, will leave after the collapse of a tentative takeover offer from BlackBerry’s largest shareholder, the company said on Monday. Instead of purchasing BlackBerry and taking it private, the largest shareholder, Fairfax Financial Holdings, and an unnamed group of institutional investors will invest $1 billion through debentures that can be converted into common shares at a price of $10 a share.
“There has long been skepticism about the ability of Fairfax to turn its tentative offer, which values BlackBerry at $4.7 billion, into a firm bid. Since it first made the offer in September, shares in the ailing smartphone maker never rose to Fairfax’s $9 a share price.”
It appears that Fairfax Financial has been able to essentially seize control over the company for significantly less than the $4.7 billion takeover bid. Fairfax leader, Prem Watsa, has taken over Blackberry’s head director position, and the new investment comes with a new CEO as well who was appointed by Fairfax. As reported by forbes.com:
“The latest bid to save BlackBerry will come under new leadership though, as Monday’s announcement included the ouster of Chief Executive Thorsten Heins. The company announced former Sybase CEO John Chen, who is taking over as executive chairman, will serve as interim CEO. Watsa will be appointed lead director and helm the board’s committees on compensation, nominations and governance. will become interim chief and take over as chair of BlackBerry’s board.”
Though Blackberry’s intellectual property still holds some value, the future doesn’t look bright for the Canadian company. More than likely, the company will either have to go private or it will be broken up and sold for its parts.
