BlackBerry Ltd. bidder Fairfax Financial Holdings Ltd. walked away from a $4.7 billion takeover plan, sending the stock plunging as the company attempts to recover with a management shakeup and $1 billion bond deal.

Rather than acquiring the company, Fairfax will invest $250 million in the convertible bonds, according to a statement Monday. As part of the new agreement, Chief Executive Officer Thorsten Heins will step down from the company. Former Sybase AG CEO John Chen will become executive chairman, putting him in charge of the company’s strategy.

BlackBerry shares fell as low as $6.27 in premarket trading after closing at $7.77 on Friday. The stock was already down 35 percent this year before Monday tumble.

“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 today in the statement. “This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.”

Fairfax, a Toronto-based investment firm, had until 5 p.m. Monday to come forward with a more definitive offer for the Canadian smartphone maker, following the preliminary takeover proposal it made six weeks ago. The company had been struggling to attract the financing for the deal, according to people familiar with the deliberations. It also never named any other members of its takeover coalition.

BlackBerry kicked off the bidding process in August when it said it would consider selling the company as part of a strategic review. At the time, Fairfax CEO Prem Watsa left the smartphone maker’s board so he could pursue a deal. He will now be rejoining the board as lead director.

The company put itself on the block after a new operating system failed to regain ground lost to Apple Inc.’s iPhone and devices powered by Google Inc.’s Android software.

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