BlackBerry (BBRY_) shares
are plunging, down 16.1% to $6.52 as the company is
abandoning its sale to Fairfax Financial Holdings. Instead,
it's selling $1 billion worth of convertible debt, with Fairfax
buying $250 million worth of the offering, and CEO
Thorsten Heins is on his way out.
Under terms of the transaction, the debt will have a
28.7% premium to BlackBerry's shares as of Nov. 1, 2013,
or $10 per share. The debt has a term of seven years,
and represents approximately 16% of all BlackBerry's
common stock, after the conversion.
"Upon the closing of the transaction, John S. Chen will be
appointed Executive Chair of BlackBerry's Board of
Directors and, in that role, will be responsible for the
strategic direction, strategic relationships and
organizational goals of BlackBerry," the company said in
a press release . "Prem Watsa, Chairman and CEO of
Fairfax, will be appointed Lead Director and Chair of
the Compensation, Nomination and Governance
Committee and Thorsten Heins and David Kerr intend to
resign from the Board at closing."
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