BlackBerry halts bid to sell itself; CEO to leave

Investor boosts stake as company names new chair

CEO Thorsten Heins, who unveiled new BlackBerry products in January, is stepping down.
Timothy Clary/AFP/Getty Images/file
CEO Thorsten Heins, who unveiled new BlackBerry products in January, is stepping down.

TORONTO — BlackBerry abandoned its bid to sell itself on Monday and said it will replace its chief executive.

Fairfax Financial, Holdings Ltd., BlackBerry’s largest shareholder with a 10 percent stake, said it would not buy the struggling smartphone company and take it private but would, with other investors, inject $1 billion as part of a revised investment proposal.

BlackBerry said Thorsten Heins is stepping down. Heins took over in early 2012 after the company lost billions in market value, but he failed to turn the company around with BlackBerry’s new devices this year.


Former Sybase chief executive John Chen has been appointed chair of BlackBerry’s board of directors and will serve as interim chief executive. In an interview, Chen emphasized the importance of software, which could portend a strategy shift for a company built on selling smartphones.

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Chen said he’ll be looking for a chief executive with a strong software and services background. He noted that BlackBerry Messenger, the popular messaging application, has been downloaded by over 20 million users since it became available on Google’s Android and Apple’s IOS platforms.

‘‘I’d like to find somebody to help me monetize that,’’ Chen said.

Chen also said he wants to focus on business users.

Fairfax head Prem Watsa will be appointed to the board. Watsa said Chen did a terrific job of turning around Sybase, an enterprise software data management company. Chen was chairman and chief executive until the company was acquired in 2010 by SAP AG.


‘‘He joined in 1998 and the company was going through similar problems, the stock price was down 90 percent, four years of losses, John joined them and had one of the best track records that I have seen,’’ Watsa said.

Watsa said he remains a fan of Heins: ‘‘I think Thorsten did a terrific job given the hand he had been dealt.”

BlackBerry said in September Fairfax signed a letter of intent that contemplated buying BlackBerry for $9 a share, or $4.7 billion, and taking it private. Fairfax said then it wouldn’t increase its 10 percent stake and the company went about trying to attract other investors.

Watsa said they did due diligence and worked with a consulting company that recommended against taking it private with borrowed money.

‘‘To load this company with too much debt was not appropriate,’’ Watsa said. ‘‘We didn’t want it leveraged. We didn’t even bother to go there.’’


The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before Apple introduced the iPhone in 2007 and showed that phones can handle much more than e-mail and phone calls.

In the years since, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals.