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 offer."
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 scheme.