Following a court order slapping a permanent injunction on BlackBerry maker Research In Motion's $53 million hostile takeover bid for Certicom, the developer of elliptic curve cryptography technology, RIM drops its offer.
BlackBerry maker Research In Motion
said Jan. 20 it is withdrawing its $53
million hostile takeover bid for Certicom
after an Ontario Superior Court
granted Certicom's request for a permanent injunction blocking the deal. The
Certicom board opposes the RIM bid as undervaluing the company that develops
the elliptic curve cryptography technology coveted by RIM.
The court decision left RIM little choice but to abandon the hostile
takeover it launched on Dec.
10, 2008. A Jan. 20 Certicom statement said if RIM wants to
organize another bid, it must do so with Certicom's permission and in
compliance with its nondisclosure agreements with the company.
Certicom claims that a nondisclosure deal between RIM and Certicom allowed
RIM access to significant inside information and a timing advantage over other
interested bidders. Certicom also contends that RIM has not disclosed to
Certicom shareholders that it has had the benefit of evaluating Certicom's
confidential information and used that information in making its offer.
"RIM's hostile bid undervalues both Certicom's valuable and unique
industry-leading data encryption technology and the recent progress the company
has made in implementing its strategic plan," Certicom said in a Jan. 5
letter to stockholders. "RIM is attempting to acquire almost $2 in cash
and potential tax benefits for $1.50, and would not be paying fair value for
the valuable assets and operations of your company."
The letter added, "The board of directors is convinced
that continuing to hold Certicom shares provides better potential
shareholder value and is far preferable to accepting RIM's undervalued
After Certicom initially rebuffed RIM's offer, the company extended its bid
to shareholders from Jan. 15 to Jan. 27. RIM insisted that its offer to acquire
Certicom was a fair deal.
"As we are unable to engage Certicom management in a meaningful
dialogue to advance the terms of a potential transaction, we believe it is in
the best interests of our respective shareholders, employees and customers to
make this attractive offer directly to Certicom shareholders," RIM co-CEO
Jim Balsillie said in a Jan. 5 statement.
Certicom manages and secures the value of
content, applications and devices with government-approved security. Adopted by
the NSA (National Security Agency) for government communications, elliptic
curve cryptography provides the most security per bit of any known public-key