The Fairfax Financial buyout is off, the company is no longer for sale, Heins is out and goodness only knows what’s going to happen next in the never-ending drama that is BlackBerry.
In a surprising development Monday, the mobile maker announced Thorsten Heins – the man brought in to turn the company around following the departure of co-CEOs Mike Lazaridis and Jim Balsillie in January 2012 – will step down as CEO, while the $4.7 billion buyout offer from Toronto-based consortium Fairfax Financial is now off the table.
It’s not clear why the Fairfax offer is dead, though recent reports suggested it was having problems financing the deal.
Instead, Fairfax will lead a group investing $1 billion in BlackBerry. Barbara Stymiest, chair of BlackBerry’s board, said the new financing will provide “an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.”
As for Heins’ successor, the company will hand the baton to John Chen, former CEO of enterprise software company Sybase, while it searches for a permanent replacement.
“I am pleased to join a company with as much potential as BlackBerry,” Chen said in a release Monday. “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success.”
Following his appointment, Chen told the Associated Press that BlackBerry is “really not in phones but we’re in phones for software, for services,” adding that he wanted to find a CEO with a strong software and services background. Chen’s words suggest BlackBerry may at some point cease selling handsets – a space in which it once excelled – though in another interview he said he wanted to continue with handset development, believing that there are “enough ingredients to build a long-term sustainable business.”
The Waterloo, Ontario firm said Monday’s decisions signal the end of its two-month exploration of “strategic alternatives” for the company. During that time, Fairfax put in its failed $4.7 billion offer for BlackBerry, while reports at the time suggested company founder and former CEO Mike Lazaridis was looking to make a bid. Tech company Lenovo and social networking site Facebook were also thought to be considering their own offers.
Monday’s announcement comes as the company makes plans to lay off 4,500 workers, equal to 40 percent of its workforce, as it struggles to remain relevant in an industry where other mobile operating systems, such as Apple’s iOS and Google’s Android, have left it behind.
Once the world’s leading maker of smartphones, the company formerly known as Research In Motion once had a more than 50 percent share of the US market. The arrival of the iPhone in 2007, as well as plenty of appealing Android handsets, has resulted in its share plummeting to just 3 percent.