 "BlackBerry puts off effort to sell itself")
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.
In premarket trading, shares of BlackBerry were plummeting.
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.
John S. Chen, the former chief executive of Sybase, will become BlackBerry's executive chairman and acting chief executive.
Along with the cash infusion into BlackBerry, V. Prem Watsa, the chairman and chief executive of Fairfax, will return to the phone maker's board. Watsa had resigned after the company announced that it was reviewing strategic options, including a sale, in the summer.
Heins, a former Siemens executive in Germany, became chief executive in January 2012 after James L. Balsillie and Mike Lazaridis, the longtime co-chairmen and co-chief executives, resigned in the face of a rapid decline in BlackBerry's business and the failure of its PlayBook tablet computer.
Formerly the head of the company's handset business, Heins heavily promoted the new line of BlackBerry 10 handsets as the company's salvation. They proved, however, to be a commercial failure setting off the company's collapse. Chen led Sybase from 1998 until the company was acquired by SAP of Germany in 2010. He is widely credited with saving Sybase from bankruptcy. When he arrived, Sybase had lost much of its corporate database business to Oracle, IBM and Microsoft. Unprofitable, it had also developed a reputation for producing unreliable software. After resolving the problems in Sybase's traditional business, Chen expanded it into producing software for creating applications, mainly for businesses, for use on wireless mobile devices and software used to manage wireless networks.
More recently, Chen has been a senior adviser to the private equity firm Silver Lake Partners, which, with Michael S. Dell, recently took Dell private.
It is unclear if the investment by Fairfax will affect an attempt by group that includes Lazaridis and Doug Fregin, the other co-founder of BlackBerry, as well as Qualcomm, which makes the chips inside BlackBerry phones and the private equity firm Cerberus Capital Management to make a bid for the company.
Other companies have also looked into BlackBerry as a potential acquisition although it is not clear if they have any interest in a bid.
JPMorgan Chase, Perella Weinberg Partners and RBC Capital Markets are advising BlackBerry. Skadden, Arps, Slate, Meagher & Flom, Torys and Blake, Cassels & Graydon are serving as legal advisers.
BDT & Company, Bank of America Merrill Lynch and BMO Capital Markets are and the lawfirms of Shearman & Sterling and McCarthy Tetrault are advising Fairfax. BMO Capital Markets is also acting as the sole bookrunner for the private placement.
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.
In premarket trading, shares of BlackBerry were plummeting.
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.
John S. Chen, the former chief executive of Sybase, will become BlackBerry's executive chairman and acting chief executive.
Along with the cash infusion into BlackBerry, V. Prem Watsa, the chairman and chief executive of Fairfax, will return to the phone maker's board. Watsa had resigned after the company announced that it was reviewing strategic options, including a sale, in the summer.
Heins, a former Siemens executive in Germany, became chief executive in January 2012 after James L. Balsillie and Mike Lazaridis, the longtime co-chairmen and co-chief executives, resigned in the face of a rapid decline in BlackBerry's business and the failure of its PlayBook tablet computer.
Formerly the head of the company's handset business, Heins heavily promoted the new line of BlackBerry 10 handsets as the company's salvation. They proved, however, to be a commercial failure setting off the company's collapse. Chen led Sybase from 1998 until the company was acquired by SAP of Germany in 2010. He is widely credited with saving Sybase from bankruptcy. When he arrived, Sybase had lost much of its corporate database business to Oracle, IBM and Microsoft. Unprofitable, it had also developed a reputation for producing unreliable software. After resolving the problems in Sybase's traditional business, Chen expanded it into producing software for creating applications, mainly for businesses, for use on wireless mobile devices and software used to manage wireless networks.
More recently, Chen has been a senior adviser to the private equity firm Silver Lake Partners, which, with Michael S. Dell, recently took Dell private.
It is unclear if the investment by Fairfax will affect an attempt by group that includes Lazaridis and Doug Fregin, the other co-founder of BlackBerry, as well as Qualcomm, which makes the chips inside BlackBerry phones and the private equity firm Cerberus Capital Management to make a bid for the company.
Other companies have also looked into BlackBerry as a potential acquisition although it is not clear if they have any interest in a bid.
JPMorgan Chase, Perella Weinberg Partners and RBC Capital Markets are advising BlackBerry. Skadden, Arps, Slate, Meagher & Flom, Torys and Blake, Cassels & Graydon are serving as legal advisers.
BDT & Company, Bank of America Merrill Lynch and BMO Capital Markets are and the lawfirms of Shearman & Sterling and McCarthy Tetrault are advising Fairfax. BMO Capital Markets is also acting as the sole bookrunner for the private placement.
©2013 The New York Times News Service