Fairfax Financial's bid to buy BlackBerry has failed, the struggling smartphone maker has given up the search for a buyer and its CEO will resign, the company announced Monday morning.
It is the second time in two years the company has replaced its chief executives.
Shares closed Monday down nearly 17 per cent at $6.75, much lower than the $9 U.S. per share Fairfax had offered in its failed bid. Monday marked the deadline for it to review BlackBerry's books. Still, BlackBerry’s chair of the board called the news a “significant vote of confidence in BlackBerry.”
Instead of taking the company private as planned, Fairfax Financial said the group of institutional investors it leads will invest $1 billion U.S. in the company through a private placement of bonds.
“Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said board chair Barbara Stymiest.
“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."
Fairfax Financial, run by billionaire Prem Watsa, offered $4.7 billion for BlackBerry in September, but according to multiple news reports, struggled to raise the financing for the bid. No other bidder stepped forward during the sale process.
Changes to the management and board, including the ouster of Heins and David Kerr, a director of the board, will happen once the deal closes.
John Chen, formerly the CEO of Sybase Inc.,will be appointed executive chair of BlackBerry’s board and interim CEO.
The company will then begin the search for a new permanent CEO.
Barbara Stymiest said the decisions announced Monday were the result of a strategic review that began in August after the board determined this course of action would be in the best interest of the company and its shareholders.
Fairfax already owns 9.9 per cent of BlackBerry. Watsa has been appointed lead director of the board. He had previously stepped down from the board earlier this year as his company contemplated its purchase of the Waterloo, Ont.-based company.
Fairfax's bid for the company came shortly after BlackBerry announced a massive $965-million loss for the second quarter, and job cuts amounting to 40 per cent of its workforce.
Heins' short run as CEO of BlackBerry began in January, 2012, when co-founder Jim Balsillie and Mike Lazaridis stepped down as co-CEOs, following another negative earnings report.
Heins said at the time of his appointment he intended to bring BlackBerry back as one of the top three smartphone players in the world. But since then, the company has seen its market share continue to slide and its BlackBerry 10 line of phones, released earlier this year, appears to have failed to stem the company's bleeding.
Stymiest praised his accomplishments as CEO, including the delivery of the BB10 platform.
“We are grateful for his contributions and wish him well in his future endeavors."
RIM Inter@ctive Pager 950 (1998)
The RIM Inter@ctive Pager 950 was one of the first true BlackBerry devices. Released in 1998 it looks more like a large pager - because that's exactly what it was. But it could also handle messages up to 16,000 characters, and came with an Intel 386 processor - which was pretty good at the time. Oh, and it ran for almost a month on a single AA batter. Take that, iPhone. It cost $350 at launch.
RIM 957 Wireless Handheld (2000)
The RIM 957 Wireless Handheld was introduced in April 2000, and was described as a "breakthrough palm sized wireless handheld". It gave users access to the Internet, email, pager and organiser functions, with a 32 bit Intel 386 processor and 5MB of flash memory. It was the first device to offer 'always on" performance, and sold for about $500.
BlackBerry 5810 (2002)
The first true 'BlackBerry' was the 5810 - and it was also the first to include Voice Calls. That's right - the earlier devices weren't even phones, making this the first truly integrated phone-organiser-email-thingy. It was expensive - $749 - but could do just about most of the same things a basic smartphone can do today.
One of the most famous - even iconic - BlackBerry devices ever was the classic blue Blackberry 7230, which came with a 65k colour screen instead of the old monochrome versi0on, as well as 16MB of storage and a battery with up to 240 hours of stand-by. It sold for about $400 at the time, and featured a full QWERTY keyboard.
The BlackBerry 7100 series featured the company's first models without a full keyboard, instead opting for the T9 'SureType' system familiar from other mobiles. The phones were popular with the mass-market as they looked and were sized similar to normal phones,. They were marketed to consumers for about $200.
BlackBerry 8700 (2005)
The BlackBerry 8700 was the first of its handhelds to use high-speed internet via EDGE. It offered much faster browsing and came with a QVGA 320 by 240-pixels screen, as well as Bluetooth support and 64mb of Flash memory.
BlackBerry Pearl (2006)
The Pearl was at the time the smallest BlackBerry ever released. It weighed just over 3 pounds and cost just $200 with a two-year contract. It was the first BlackBerry to come with a camera and a microSD slot.
BlackBerry Curve (2007)
The BlackBerry Curve 8300 came with a camera, a 3.5 headphone jack and a full QWERTY keyboard. It was pretty cheap - $200 on contract - but looked more like a high-end professional device.
BlackBerry Bold (2008)
The BlackBerry Bold is in some ways the ultimate BlackBerry - sleek, dark, with a full QWERTY keyboard and support for 3G networks, 1GB of memory and a higher-resolution display, it pretty much opitimises what the BlackBerry was all about.
BlackBerry Storm (2008)
The Storm was BlackBerry's first phone without a keyboard, and it launched to mixed reviews. It was clear that RIM's software wasn't able to keep up with the current crop of devices, and that BlackBerry needed a relaunch. That wouldn't happen until 2013.
BlackBerry Torch (2010)
The BlackBerry torch was pitched as the first "elite" consumer offering from RIM. It's slider form factor, full keyboard and touchscreen placed it as the mid point between and iPhone and an old school Blackberry, but for reviewers it wasn't able to do either job well and it failed to gain much attention.