BlackBerry Abandons the Search for a Buyer

Fairfax Financial is no longer offering to buy BlackBerry. But it will lend the smartphone company money

Written by David Friend, The Canadian Press

Fairfax Financial is no longer offering to buy BlackBerry outright and BlackBerry chief executive Thorsten Heins is leaving the company.

Instead, Fairfax is leading a group that will lend US$1 billion to the smartphone company. Fairfax will provide about one-quarter of the cash infusion.

It’s a major change from its original proposal, six weeks ago, when Fairfax offered to lead a group to buy the Waterloo, Ont. based company outright at US$9 per share.

News of the announcement sent BlackBerry shares plunging 18% in premarket trade to US$7.77 before a trading halt was issued.

BlackBerry says Heins will be replaced on an interim basis by John Chen, who will also be the chairman of a revamped BlackBerry board.

Barbara Stymiest, who has chaired the BlackBerry board, says the revised offer from Fairfax — the company’s largest shareholder — is a vote of confidence.

“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,” Stymiest said in a statement.

“This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.”

Read: The Bright Side of Blackberry’s Troubles

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