IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

BlackBerry CEO out as Fairfax buyout bid fails

Ailing smartphone maker ditches plans to find a buyer, and is now seeking to raise $1 billion in new funding.

Fire exit

BlackBerry CEO Thorsten Heins is heading for the exit doors now an attempt to acquire the firm by its largest shareholder Fairfax Financial Holdings has failed.

The firm has apparently reneged on its decision to seek a buyer, and will instead set about raising $1 billion in new funding from institutional investors.

The change of strategy means Heins will leave the company, and will be replaced by former Sybase CEO John S Chen in the interim, after Fairfax's bid to acquire the firm floundered.

Fairfax set out plans to acquire BlackBerry in September for $4.7 billion, but doubts have been cast in recent days over whether the proposed deal would succeed.

In a report on Reuters late last Friday, it was claimed Fairfax was struggling to finance the deal, because of fears BlackBerry was beyond saving.

The article claimed several large banks had turned down requests to participate in the deal for this reason.

Fairfax had until today to raise the funding and complete its analysis of BlackBerry's finances, but will now contribute $250 million towards helping the firm reach its $1 billion fundraising target.

Barbara Stymiest, chair of BlackBerry's board, said the change in strategy was in the best interests of BlackBerry and its shareholders.

"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of pre-eminent, long-term investors," said Stymiest.

Jan Dawson, chief telecoms analyst at market watcher Ovum, said Shen's appointment suggests the company's board sees a future for BlackBerry in software and services, rather than devices.

"BlackBerry's new investors seem to see its future in software, which means using BlackBerry servers as the core of a broader enterprise device management platform, but this generates very little revenue for the company today. Though it's achieved some traction with enterprises upgrading their BlackBerry servers, it has failed to sell many BlackBerry 10 devices, and this looks unlikely to change.

"This ultimately harms the unique selling point of BlackBerry server products leaving the door open to replacement by rivals that are better able to support the more popular Apple and Android devices," Dawson added.

Today's news is the latest twist in a turbulent year for BlackBerry, which has seen it forced to cut jobs and swallow inventory charges of more than $930 million after failing to shift enough Z10 smartphones.

On a more positive note, the company recently confirmed that 20 million people have downloaded its BBM messenger software for Android and iOS devices.

Featured Resources

Accelerating AI modernisation with data infrastructure

Generate business value from your AI initiatives

Free Download

Recommendations for managing AI risks

Integrate your external AI tool findings into your broader security programs

Free Download

Modernise your legacy databases in the cloud

An introduction to cloud databases

Free Download

Powering through to innovation

IT agility drive digital transformation

Free Download

Recommended

Best business smartphones 2022: The top handsets from Apple, Samsung, Google and more
Mobile

Best business smartphones 2022: The top handsets from Apple, Samsung, Google and more

23 Jun 2022
BlackBerry revival is officially dead as OnwardMobility shuts down
Mobile Phones

BlackBerry revival is officially dead as OnwardMobility shuts down

22 Feb 2022

Most Popular

The UK's best cities for tech workers in 2022
Business strategy

The UK's best cities for tech workers in 2022

24 Jun 2022
LockBit 2.0 ransomware disguised as PDFs distributed in email attacks
Security

LockBit 2.0 ransomware disguised as PDFs distributed in email attacks

27 Jun 2022
Salaries for the least popular programming languages surge as much as 44%
Development

Salaries for the least popular programming languages surge as much as 44%

23 Jun 2022