BlackBerry maker Research In Motion has extended the deadline for Certicom stockholders to accept RIM's hostile takeover bid of $1.50 a share from Jan. 15 to Jan. 27. The Certicom board opposes the approximately $53 million bid from RIM as undervaluing the company that develops the elliptic curve cryptography technology coveted by RIM.
Certicom went to court Dec. 22 seeking an injunction to block the hostile takeover bid by RIM, claiming that RIM's access to Certicom's confidential information and its use of that information in connection with RIM's bid violates nondisclosure agreements signed by RIM and Certicom in 2007 and 2008. A hearing in the Ontario Superior Court of Justice is scheduled for Jan. 9.
Certicom warned shareholders that are tempted to tender their shares to RIM that they would lose the opportunity to benefit from Certicom's near- and long-term growth prospects. "As a result, 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," Certicom stated in a Dec. 22 letter to shareholders.
In extending its bid acceptance deadline, RIM insisted that its offer to acquire Certicom is 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 statement.
Certicom claims that the nondisclosure deal between RIM and Certicom allowed RIM access to significant inside information and a timing advantage over other parties that may have an interest in entering into an alternative transaction. 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 its letter to stockholders. "RIM is attempting to acquire almost $2.00 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."
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.