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OTTAWA — A tentative takeover bid for BlackBerry from its largest shareholder collapsed on Monday, clouding the immediate future of the company.

Fairfax Financial Holdings of Toronto, the insurance and investment company, had made a conditional, nonbinding offer to buy the 90 percent of BlackBerry shares it does not own for $9 each, valuing the company at about $4.7 billion. But Fairfax announced on Monday that it would not proceed with the offer, setting the once-mighty company on a path into the unknown and sending its stock into a tailspin. Shares of BlackBerry fell more than 16 percent, to $6.49.

Adding to the uncertainty and confusion was the company’s announcement that Thorsten Heins, who was appointed chief executive in January 2012 with a mandate to turn the company around, had stepped down. BlackBerry said that John S. Chen, the former chief executive of Sybase, would become BlackBerry’s executive chairman and acting chief executive but offered no indication of how long he would serve in the top management role.

In place of a takeover, Fairfax and a group of institutional investors will invest $1 billion through debt securities that can be converted into common shares at $10 a share. Exactly how BlackBerry will use that cash to restore its position in the smartphone market is unclear, and neither Fairfax nor BlackBerry would identify the other investors.

V. Prem Watsa, chairman and chief executive of Fairfax, will return to BlackBerry’s board as lead director. Mr. Watsa resigned this summer after Fairfax announced that it was reviewing strategic options, including a sale.

The investment, rather than a takeover, was considered as early as a week ago, alongside several other options, and terms were firmed up over the weekend, according to people involved in the process. They said the investment was preferable to an arrangement in which BlackBerry was taken private but saddled with a large debt load.

Though the institutional investors have not been identified, people close to the process said that about five firms had contributed capital to the pool, suggesting no one investor was putting in a majority of the money.

“This is important for Canada,” one person involved in the process said. “There is a real path forward.”

But many questions were left unanswered, including the broad intentions of Fairfax and Mr. Chen. It was unclear whether Fairfax was simply buying time to try another sale or whether Mr. Chen had been brought in to mimic the sharp turnaround he brought to Sybase.

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Mr. Chen led Sybase from 1998 until last year. He is widely credited with saving Sybase from bankruptcy. When he arrived, Sybase had lost much of its corporate database business to Oracle, IBM and Microsoft. Unprofitable, it had also developed a reputation for producing unreliable software.

After resolving the problems in Sybase’s traditional business, Mr. Chen expanded it into producing software for creating applications, mainly for businesses, for use on wireless mobile devices and to manage wireless networks. While that decision proved prescient, it was widely viewed with skepticism at the time.

After leaving Sybase, which was acquired by SAP of Germany in 2010, Mr. Chen became a senior adviser to the private equity firm Silver Lake Partners, which, with Michael S. Dell, recently took Dell private.

Jan Dawson, a technology analyst with Ovum in London, said the appointment of Mr. Chen might be the strongest indication about BlackBerry’s direction.

“That’s a signal in its own right about the kind of future that Prem Watsa and Fairfax see for BlackBerry,” he said. “It’s a future based on software and services, not handsets.”

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Under Mr. Heins, who previously ran BlackBerry’s handset business, the company staked its future on a new line of phones using the BlackBerry 10 operating system, which made the company’s products more competitive in technological terms with Apple’s iPhone and phones using Google’s Android operating system. But when BlackBerry 10 arrived early this year, many analysts viewed it as at least two years too late. Its commercial failure led the company to report a $1 billion quarterly loss during the summer and prompted Fairfax’s tentative offer.

About half of BlackBerry’s revenue now comes from phones and the rest from software and the fees it charges corporations and governments for running their BlackBerry data through the company’s proprietary secure network.

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But creating a BlackBerry without phones, Mr. Dawson cautioned, will not be easy. Most of BlackBerry’s service business, he said, is closely linked to BlackBerry handsets.

While BlackBerry Messenger, an instant messaging service, was recently expanded to the top two operating systems, the overwhelming majority of its users still own BlackBerry phones.

Similarly, the BlackBerry software that corporate and government phones use to control their employees’ handsets — and which generates monthly fees for BlackBerry — has also been adapted to work with iPhone and Android devices. But most analysts say that when it comes to its competitors’ phones, which now dominate the marketplace, BlackBerry’s software significantly lags similar offerings from a variety of companies including Good Technology, MobileIron and AirWatch.

Even if BlackBerry is exceptionally successful with its service and software business, the scale of that industry makes it unlikely that it will ever duplicate the revenue it once earned from the much larger handset market.

Roger L. Kay, the president of Endpoint Technology Associates, said that Mr. Chen was an inspired choice.

“He has the perfect résumé to do the job,” said Mr. Kay, who followed Mr. Chen’s work at Sybase.

But given that Mr. Chen has been appointed only acting chief executive, Mr. Kay is skeptical that he will devote the time and energy needed to turn around a very troubled company. If nothing else, Mr. Kay does not see Mr. Chen, who is 58, leaving California to spend long days for the next several years at BlackBerry’s headquarters in Waterloo, Ontario.

The chief contribution of Mr. Chen, Mr. Kay said, is likely to be giving the company some direction about how to handle its problems as well as possibly using his industry connections to find a permanent chief executive and partners.

“I don’t think he has a ‘This is what the answer is’ — I think he has a process,” Mr. Kay said.

A spokesman for BlackBerry said that Mr. Chen was not available for comment.

Under the terms of his contract, Mr. Heins will receive a substantial severance payment after less than two years at the top of the company. A regulatory filing released in May indicated that the amount at the end of the company’s last fiscal year stood at $22 million.

Ian Austen reported from Ottawa and David Gelles from New York.