A consortium led by Fairfax Financial Holdings has abandoned a US$4.7bn bid to acquire smartphone maker BlackBerry. Instead, Fairfax and other investors will invest US$1.1bn in the Canadian firm and CEO Thorsten Heins will step down from the role.
In September, a consortium led by Fairfax Financial Holdings announced its intent to acquire BlackBerry for around US$4.7bn.
However, following a six-week due diligence process, the consortium has abandoned the acquisition.
Instead, Fairfax will lead a US$1bn investment in BlackBerry with private investors. Fairfax itself will invest US$250m in BlackBerry.
The US$1bn investment will be made through a US$1bn private placement of convertible debentures, which have a term of seven years.
John Chen will be appointed executive chair of BlackBerry’s board of directors. Chen will also serve as interim CEO until a new CEO of the company is found.
“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, chair of the BlackBerry board.
“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.”