Blackberry stock plunges as takeover bid collapses
Blackberry stock fell as low as $6.27 in pre-market trading after bidder Fairfax Financial Holdings dropped its $4.7-billion takeover plan and said instead it would invest in the company.
The company also said Chief Executive Thorsten Heins will step down, and former Sybase CEO John Chen will become executive chairman.
The company’s shares fell as low as $6.27 after closing at $7.77 on Friday. The shares have fallen 35% this year as the company has struggled with dwindling sales of its smartphones.
Fairfax, a Toronto investment firm, had until 5 p.m. Monday to make a detailed offer for Blackberry.
“The BlackBerry board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders,” Barbara Stymiest, the company’s chairman, said Monday in a statement. This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.”
Fairfax said it would invest $250 million in convertible bonds.