RIM's Certicom takeover bid hits a snag

24.12.2008
With barely two weeks to go before the end of the year, Research in Motion Ltd.'s (RIM) C$66 million (US$54 million) hostile takeover bid for encryption specialist Certicom Corp. has hit a snag.

It appears the Waterloo, Ont-based maker of BlackBerry smartphones will begin the New Year locked in a court battle to salvage its attempts to acquire the Mississauga, Ont-headquartered Certicom after learning that Certicom intends to file submissions before the Ontario Supreme Court of Justice and the Ontario Security Commission for and injunction and a cease trade order respectively preventing RIM from acquiring Certicom shares.

Certicom is best known for its Elliptic Curve Cryptography (ECC), which is used by Motorola, IBM and other customers including military and government departments to protect information. Certicom says the technology meets U.S. National Security Agency standards. Acquiring Certicom will bolster the BlackBerry's security posture and make the handset more attractive to government buyers.

On Dec. 10, RIM made an offer of C$1.50 per Certicom share. Last Thursday, Certicom called RIM's takeover bid "highly opportunistic." The security company's special committee of independent directors urged shareholders not to take any action regarding the offer.

Certicom alleged that RIM used confidential information contrary to the terms if agreements entered between RIM and Certicom. Certicom also said RIM failed to make proper disclosure in its offer to purchase sent to Certicom shareholders.

"RIM intends to vigorously oppose Certicom's allegations," according to a statement issued by the mobile handset maker yesterday.