NEW YORK (The Deal) -- BlackBerry (BBRY) is hitting reboot once again, with the troubled phone maker Monday, Nov. 4, abandoning plans to sell itself and sacking its CEO after major shareholder Fairfax Financial Holdings walked away from a proposed $4.7 billion buyout.
Waterloo, Ont.-based BlackBerry said Fairfax instead would invest $250 million in a $1 billion convertible debentures sale. Fairfax in September had agreed to a tentative deal to buy the company but had until end of business Monday to secure financing for the purchase and make a definitive offer.
BlackBerry said it has concluded a review of strategic alternatives first announced in August, and would instead go it alone with a new management team.
Upon closing of the bond sale, CEO Thorsten Heins will step down and one-time Sybase CEO John Chen will be named executive chairman of the board. Fairfax CEO Prem Watsa, who stepped down from the board last summer ahead of his firm's bid for BlackBerry, will rejoin the group and serve as lead director.
Chen will also serve as interim CEO. The convertible bond sale is priced at $10 per common share, a premium of 28.7% to BlackBerry's Nov. 1 close, and if fully converted would represent about 16% of the company's common shares.
The reshuffling continues a long downward spiral at BlackBerry, a one-time high flier which has lost more than 80% of its value since the beginning of 2011 as its smartphones have been outmuscled by offerings from Appleand products running Google's Android operating system.