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Research in Motion co-CEO Jim Balsillie signed an agreement to buy the Pittsburgh Penguins in October. ((Adrian Wyld/Canadian Press) )

Canadian billionaire Jim Balsillie withdrew his offer to purchase the Pittsburgh Penguins, the team announced Friday.

Balsillie, co-chief executive officer of Canada's Research in Motion Ltd. — the maker of the BlackBerry — agreed to buy the Penguins for $175 million US in October, pending approval by the league.

"Jim Balsillie delivered a notice of termination today, and it is our understanding that he has stopped negotiating with the National Hockey League to get the necessary consent to buy the Pittsburgh Penguins," current owner Mario Lemieux said in a news release.

"While these developments create significant uncertainty, the Penguins organization will re-evaluate our situation after the Pennsylvania Gaming Control Board makes the decision on the awarding of the Pittsburgh gaming licence."

Isle of Capri Casinos Inc., one of several candidates bidding for a casino licence for a new downtown Pittsburgh slot machine parlour, agreed to build a $290-million arena for the Penguins to take the place of the 45-year-old Mellon Arena.

Taxpayers would avoid any costs should the Capri group receive the licence.

The licence is expected to be awarded next week.

"What is clear is the best way to assure that the team remains viable and in Pittsburgh is to award the gaming licence to the Isle of Capri," Lemieux said.

'Development unfortunate': Bettman

NHL commissioner Gary Bettman also acknowledged that the Penguins' future in Pittsburgh is dependent on the granting of the Isle of Capri licence.

"Today's development was unfortunate," he said in a statement. "If the Isle of Capri is not granted the licence on Wednesday, then an already difficult and volatile situation will be aggravated.

"It is imperative that the Penguins have a new arena on economic terms that make sense for the franchise [in order] for the team to remain in Pittsburgh."

Reports suggest part of the reason Balsillie walked away from the sale was his displeasure with league's mandate to keep the team in Pittsburgh as part of the agreement.

There had been speculation that Balsillie, 45, could try to move the franchise to Hamilton, which is close to his home and RIM's head office in Waterloo, Ont., if a new arena in Pittsburgh isn't built.

"It was very important for us to keep it here it Pittsburgh," Lemieux said when Balsillie signed the purchase agreement. "I think Jim is committed as long as we build a new arena and we have a fair deal."

However, Balsillie said his initial plans were to keep the team in Pittsburgh.

The news is a potential blow to the Penguins with Balsillie and his deep pockets now gone.

His firm generated revenues of $631.1 million in the three months ending June 3,up 35 per cent from $453.9 million in the same period a year earlier.

Research In Motion is one of Canada's most well-known technology companies, yetthe companyfaces regulatory investigations and is subject to a cease-trade order preventing insiders, including Balsillie, from buying or selling RIM shares.

With files from the Canadian Press