BlackBerry has today revealed that it will not sell itself to Fairfax Financial Holdings, as well as announcing that CEO Thorsten Heins will step down from his role.
The company announced that it has entered into an agreement pursuant to which Fairfax and other institutional investors will invest in BlackBerry through $1bn private placement of convertible debentures.
The announcement comes days after it was suggested that Fairfax might not be able to meet the bid deadline of today (4 November.)
Heins will step down as CEO at closing and John Chen will serve as interim chief executive officer pending completion of a search for a new CEO.
“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” said Barbara Stymiest, chair of BlackBerry’s Board.
“The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders. This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.”
Stymiest added: “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.”
Fairfax has agreed to acquire $250m principal amount of the debentures. The transaction is expected to be completed within the next two weeks.