Fairfax Financial Holdings’ $4.7 billion deal to purchase struggling handset maker BlackBerry is off the table today. What’s more, BlackBerry chief Thorsten Heins has stepped down and is being replaced by interim CEO John Chen.
Instead of purchasing the company outright, Fairfax will instead lead a group of investors willing to put forth $1 billion to try and right the ship. Specifically, the investment will come through a debt sale although Fairfax will inject $250 million personally into the company.
In a statement on the matter, current BlackBerry chair Barbara Stymiest said the board conducted a thorough review of strategic options and pursued the course of action that they believe is in the best interest of BlackBerry and its constituents and shareholders. She further noted that today’s announcement represents a significant vote of confidence in the company and its future by the group of preeminent, long-term investors.
Interim CEO John Chen most recently helped turn around Sybase, a company that found itself in a situation not unlike BlackBerry’s at one point. He has extensive experience in the mobile sector which is expected to be an asset to the company until a permanent replacement can be found. Stymiest noted as much in the aforementioned statement.
He will also now serve as executive chair of BlackBerry’s board. Combined, that’s an awful lot of responsibility and power to take on at once.
Share value in BlackBerry has plunged nearly 16 percent on the news. As of writing, it sits at $6.55 per share.