BlackBerry has abandoned its plan to sell up to Fairfax Financial Holdings, the Canadian manufacturer’s biggest shareholder.
The “world leader in the mobile communications market”, as described in a press release issued earlier today, announced an investment of $1bn from Fairfax – who have agreed to supply $250m – and other investors.
CEO Thorsten Heins is also to step down, being replaced by former Sybase CEO John S. Chen on an interim basis. The investment deal is expected to be concluded within the next two weeks, after which Heins will depart.
It’s been a long, tough road for the Toronto firm of late. The news that the Fairfax takeover deal was off might not be a huge surprise, given there was plenty of conjecture that the bid had crumbled – yet this latest investment, whilst not being a total takeover bid, still represents a vote of confidence in the firm.
Barbara Stymiest, chair of BlackBerry’s board, said in a statement: “This financing provides an immediate cash injection on terms favourable 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.”
If you feel like you’ve read that recently, you may be right. Three weeks ago, BlackBerry published an open letter in 30 different news publications urging customers to stick with the company.
“You trust your BlackBerry to deliver your most important messages, so trust us when we deliver one of our own,” the letter stated. “You can continue to count on us.”
The language then, and the broadside now, have two things in common: firstly, BlackBerry is insistent on telling everyone that they’re more than okay for cashflow right now; and secondly, enough people use BlackBerry to continue fighting the good fight.
Mobility expert Bob Egan – a fierce critic of Heins, if this slideshow was anything to go by – has given his seal of the approval to the incoming Chen, tweeting that he’s a “smart, no BS leader.”
In a statement, Chen emphasised the potential of the BlackBerry name.
“BlackBerry is an iconic brand with enormous potential,” he said, “but it’s going to take time, discipline and tough decisions to reclaim our success.”
Yet Jan Dawson, chief telecoms analyst at Ovum, has a more pessimistic outlook, citing the transparency demands of being a public company at a sticking point.
“Fairfax’s investment will buy the company some time, which it badly needs, but the company needs a new strategy more than ever,” Dawson said.
“With BlackBerry remaining a public company, Chen and Fairfax Chairman and CEO Prem Watsa need to start communicating that new strategy very soon to inspire confidence in a turnaround,” he added.
What do you make of this news? Can the BlackBerry brand survive?
