BlackBerry bombshell: Fairfax walks away, Heins out as CEO

BlackBerry Chief Executive Thorsten Heins speaks at the company's annual meeting in Waterloo, Ontario July 9, 2013. REUTERS/Jon Blacker/Files

BlackBerry’s future took a decidedly radical turn Monday morning amid reports that Fairfax Financial Inc. would not proceed with plans to take the company private and Thorsten Heins was out as CEO.

The reports also indicate Heins, who took over from co-CEOs Mike Lazaridis and Jim Balsillie in January 2012, has also been let go as the company halts its campaign to find a buyer and instead plans to raise $1 billion in capital. A number of board members are also reportedly heading for the exits.

Fairfax had tendered a letter of intent September 23rd that outlined a US$4.7 billion – or $9 per share – bid for the Waterloo-based smartphone maker. The terms of the tentative offer included a six-week due diligence period that, in addition to giving Fairfax enough time to examine the books, also allowed BlackBerry to seek additional offers. That six-week period ended today, with intense speculation building in recent days over who else might step forward.

The tentative offer hinged on the Toronto investment company’s ability to pull together a consortium of investors to help fund the deal. Fairfax owns 10 per cent of BlackBerry’s outstanding stock, and its chairman and CEO, Prem Watsa, had sat on the company’s board until August.

In the wake of this morning’s reports, BlackBerry stock plunged 18% to a new ten-year low.