Having successfully turned back a hostile $1.50 per share hostile takeover bid from BlackBerry maker Research In Motion, Certicom announced Jan. 23 it has accepted a $2.10 per share offer from VeriSign. The deal, valued at $73 million, represents a 40 percent premium over RIM’s offer of $53 million.
Certicom said the transaction was subject to customary Canadian conditions. While there are no financing conditions tied to the deal, the transaction contains various termination rights, including that the Certicom board of directors may terminate the agreement in favor of an unsolicited superior proposal and subject to payment of a termination fee by Certicom. VeriSign has the right to match any superior offer.
The transaction is expected to close in March.
The deal comes after RIM withdrew its hostile takeover bid for Certicom after an Ontario Superior Court Jan. 21 granted Certicom’s request for a permanent injunction blocking the deal. The Certicom board opposed 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.
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 did not reveal to Certicom shareholders that it had the benefit of evaluating Certicom’s confidential information and used that information in making its offer.
After RIM launched its takeover effort, Certicom announced a review of strategic alternatives.
“The special committee and the board conducted a thorough process on behalf of Certicom shareholders, resulting in a significant increase in value for the company and its owners,” Jeffrey Chisholm, Certicom’s chairman, said in a statement. “We believe this transaction also represents a very promising opportunity for our customers and employees. Joining forces with VeriSign creates wider international opportunities for our employees, while customers will benefit from the combination of Certicom’s leading cryptography and VeriSign’s infrastructure.”
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, Certicom’s elliptic curve cryptography provides the most security per bit of any known public-key scheme.