Shares in BlackBerry plunged 16% today after the company announced that it has ditched plans to sell itself to a consortium led by Fairfax Financial Holdings for around $4.7bn.
That proposed sale was announced in September, but BlackBerry has opted instead for an alternative financing deal that will inject as much as $1 billion into the company, with Fairfax contributing around a quarter of this.
Along with the sea change in the future of the company, CEO Thorsten Heins is set to leave, with former Sybase CEO John Chen steeping in as interim CEO.
‘This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position," Barbara Stymiest, BlackBerry's board chairwoman. ‘We are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.’
BlackBerry had been talking to a variety of suitors in the hopes of finding a buyer, but the only offer was the $9 a share bid that came in late September from Fairfax. Reuters reported last week that Fairfax was struggling to finance the $4.7 billion deal.