Fairfax Financial Holdings chairman Prem Watsa, who recruited BlackBerry Ltd.’s new interim chief executive, says he did not ask former CEO Thorsten Heins to leave.
“Thorsten did a very good job given the hand that he was dealt, but resigned because you can’t have two people being in charge,” Mr. Watsa said in an interview. “He said to me, ‘It’s very appropriate for me to resign. I like John Chen, but I’m a CEO and there is one person in charge.’ ”
“Neither John Chen nor myself asked him to resign,” Mr. Watsa said.
The comments further clarify the events that led to last week’s dramatic shakeup at the smartphone maker. Last Monday, Mr. Chen, the former CEO of Sybase Inc., was named executive chairman and interim CEO of BlackBerry. A proposed takeover offer for the company from Mr. Watsa’s Fairfax fell apart, and BlackBerry’s board decided to abandon a sale process and continue on as a public company, while raising $1-billion (U.S.) in new financing.
Mr. Watsa also said that Fairfax would have worked with BlackBerry co-founder and former co-CEO Mike Lazaridis, who disclosed last month that he and fellow former co-founder Doug Fregin had hired Goldman Sachs as advisers and were considering putting together a takeover deal for BlackBerry. Mr. Lazaridis and Mr. Fregin, working with Cerberus Capital Management, put forth a highly conditional proposal that was rejected by the board.
“Mike’s a good friend,” Mr. Watsa said. “Mike wanted to go at this on his own. We’d have been happy to work with Mike, but he wanted to do this on his own.”
It was Mr. Lazaridis who first approached Mr. Watsa about joining BlackBerry’s board less than two years ago.
The two men had been introduced to one another in 2009 by David Johnston, who is currently Canada’s Governor-General but was the president of the University of Waterloo at the time. Mr. Johnston was trying to recruit Mr. Watsa as the school’s next chancellor, and asked Mr. Lazaridis, who founded Research In Motion Ltd. while he was a student at Waterloo, to help.
Mr. Lazaridis didn’t know Mr. Watsa, but he put in a call to him to persuade him to take the job, which Mr. Watsa did.
Three years later, Mr. Lazaridis reached out to Mr. Watsa again. Fairfax had become one of BlackBerry’s largest shareholders, and Mr. Lazaridis and then co-CEO Jim Balsillie wanted Mr. Watsa to join the smartphone maker’s board as the company underwent a management shakeup. In January of 2012, BlackBerry announced that Mr. Watsa would join its board and that Mr. Balsillie and Mr. Lazaridis were stepping down as executives and handing the role of CEO to Mr. Heins. Mr. Lazaridis and Mr. Balsillie both remained on BlackBerry’s board at that time.
“Mike had chosen Thorsten,” Mr. Watsa said in the interview. “I didn’t know Thorsten, but I met him and I like him. Thorsten was dealt a hand and he played it out. He brought the BlackBerry 10 devices out, which was very important. The company wouldn’t be there today if not for the BlackBerry 10 devices.
“But it seemed to me, going forward, you needed someone with the enterprise background and a very good track record. John Chen has grown up in Silicon Valley, he knows most of the players in the tech world.”
Mr. Watsa resigned from BlackBerry’s board this August, when the company decided to pursue a strategic review to weigh its options.
“I stepped off the board, I wanted to be independent – if you’re on the board you’ve got a fiduciary responsibility – to see, as a 10 per cent shareholder, what the best possibilities were for the company,” Mr. Watsa said.
With the announcement that Fairfax is leading the new financing for the company, he will once again become a director, and will be chair of the compensation, nomination and governance committee. Fairfax is purchasing $250-million worth of convertible debentures from BlackBerry. Other investors in the deal include Mackenzie Financial Corp. and Canso Investment Counsel Ltd.
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