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Tag: blackberry buyer

  • BlackBerry Buyout Fails, Thorsten Heins Ousted

    Today BlackBerry announced that the proposed $4.7 billion buyout for the company has fallen through. Today was the final day that a consortium of interested buyers led by Fairfax Financial Holdings Limited had for due dilligence. The consortium has been unable to raise the cash for the proposed sale, and instead will be investing $1 billion in BlackBerry through a debenture. This new funding is expected to come through within the next two weeks.

    “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,” said Barbara Stymiest, current chair of BlackBerry’s board of directors. “This financing provides an immediate cash injection on terms favorable 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.”

    When the funding deal concludes, current BlackBerry CEO Thorsten Heins will be out as CEO. Heins and fellow BlackBerry board member David Kerr are also expected to resign from the board at that time.

    John Chen, former CEO of Sybase, will be appointed to the role of interim CEO after the funding concludes. Chen will also join the BlackBerry board as its Executive Chair and will, according to BlackBerry, be responsible for the “strategic direction, strategic relationships and organizational goals of BlackBerry.” Prem Watsa, Chairman and CEO of Fairfax Financial, will also be appointed as the chair of the board’s Compensation, Nomination, and Governance committee.

    “I am pleased to join a company with as much potential as BlackBerry,” said Chen. “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline, and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”

    The news of the buyout failure comes as a huge blow to BlackBerry. Though the company’s BlackBerry Messenger has recently become popular on iOS and Android platforms, the software’s release could be too late to save the company.

    BlackBerry last month revealed a nearly $1 billion quarterly loss on revenues that were dismally low. The company has been struggling to sell its new BlackBerry 10 smartphones since their release early this year, and the company’s market share has continued to drop. The news also comes just as BlackBerry is in the middle of another round of layoffs, with at least 4,500 more employees expected to leave the company by the end of this year.

  • BlackBerry Sold? Who’s Buying? Will They Go Private?

    In mid August, BlackBerry, the Canadian smartphone company, announced that it was up for sale. The past few years have been difficult for the mobile communications company as they have failed to keep up with the competition from companies like Apple and Samsung.

    According to The Guardian, a consortium of investors lead by Fairfax Financial have agreed to acquire BlackBerry for just $9 per share (a $4.7 billion valuation of the company). The stock price is a far cry from the glory days of the company, when it once had a high of $148 per share on the Nasdaq.  The company also announced on Friday that it intends to lay off 4500 employees due to lackluster sales of its new handheld devices including the Z10, Q10 and the new Z30.

    The sale of the company and its employee layoffs, however, does not come as much of a surprise to many analysts, considering that BlackBerry was in the red last quarter. BlackBerry subsequently announced last month that it was considering it’s ‘strategic options’, including, selling the company entirely and possibly going private.

    In the opinion of many analysts, going private may give the company the opportunity it desperately needs to restructure. “Going private would allow BlackBerry to restructure behind closed doors where they can focus on building the company and focusing on the enterprise sector,” said Krista Napier, senior analyst, mobility, at IDC Canada.

    Fairfax currently owns 10% of BlackBerry and is currently its largest shareholder. It’s been rumored that some Toronto based investors are part of the consortium that submitted an intent to purchase. Exactly who they are has still not been revealed to the public.

    The New York Times and the Wall Street Journal reported former co-CEO and founder of BlackBerry, Mike Lazaridis was in discussions with private equity groups, the Blackstone Group and the Carlyle Group about purchasing BlackBerry and taking it private. This move would be a bit of a surprise considering Lazaridis retired from the company as recently as March of this year. None of the speculation was confirmed by Lazaridis.

    At the moment there is only a letter of intent for the acquisition of BlackBerry. Several weeks of due diligence remain so there is still time left to deal. How this will all play out remains to be seen.

    (Image from Wikimedia Commons)