BlackBerry board rejected break-up: report
Sale shelved to protect all stakeholders, insiders reveal
BlackBerry's board resisted a break-up of the company, on the grounds that it was contrary to the interests of stakeholders, it emerged this weekend.
The ailing Canadian smartphone maker last week shelved a plan to sell itself amid reported interest from a number of contenders, including Microsoft, Lenovo and Apple, to acquire parts of the company.
According to a report from Reuters, insiders said the board considered a break-up of the business to appease a buyer would not be in the interest of shareholders, employees or suppliers. Also factoring in the possible resultant value-drop in any acquired patents, it opted for a $1bn convertible notes issue to a number of institutional investors, including BlackBerry's largest shareholder Fairfax Financial Holding and Qatar's sovereign wealth fund, Qatar Holding.
The u-turn sent BlackBerry stock into a tailspin last week that dragged its market capitalisation down 16% to under $3.4bn, representing a 96% drop from its 2008 peak of $80bn.
Since the mobility platform pioneer announced that it was exploring the option of a sale, most interested parties only pursued BlackBerry's intellectual property, including its network encryption and keyboard patents. The insiders said the board had considered the cost of closing down loss-making business units and felt that short-term stability was best served by the debt-funding option.
New interim CEO John Chen, who replaces Thorsten Heins, has previously said he has no plans to dismantle BlackBerry's handset business.