When Blackberry announced one of their largest shareholders was intent on buying them out, it was a sign the struggling handset maker was holding on for dear life. Rather than move forward with the purchase, Fairfax Financial will instead lead an investment group that will inject more than $1 billion into Blackberry. The radical shift in direction doesn’t come without casualties, though.
CEO Thorsten Heins is out as Blackberry chief, along with the Chair of Blackberry’s board of directors Barbara Stymiest. Both will be replaced by John Chen, who was once the CEO of Sybase, as well as an executive with Siemens AG. The board will also see Prem Watsa, CEO of Fairfax Financial, take a seat. Watsa was previously on the board at RIM Blackberry, but left in August due to a conflict of interest.
If you’ve read through the Globe and Mail’s telling of Blackberry’s woes, you know they’re rife with problems at the top. Dual CEOs who can’t quite agree on direction, a polarizing Heins taking the helm, and stuttering to react to the iPhone all factored into one of the largest — and most spectacular — tech company failures in history. The $4.7 billion acquisition by Fairfax was thought to signal the end to all that consternation, but there were clearly issues with that as well.
The deal was contingent on Fairfax securing financial backing, and taking a look at Blackberry’s books. Blackberry also had a go-shop option which allowed them to continue to let companies court them. Many were said to have shown interest, including Google, and it could have been those discussions which led Blackberry to think they could continue to walk a path of destruction and come out clean on the other side. Then again, it could have been that Fairfax’s inability to get secure backing from the banks forced them into this new role.
Whatever the case, two things are true. First, Blackberry is sticking around. For what, we’re not sure yet, buth they’re not leaving. Second, now former CEO Heins is set to get $22 million for his termination. Had he been ousted after a change in ownership, his severance package would have netted him $56 million.
