JOHN PARTRIDGE
Globe and Mail Update Published on Thursday, Feb. 05, 2009 7:39AM EST Last updated on Thursday, Apr. 09, 2009 11:23PM EDT
Research In Motion Ltd.'s much sweetened takeover offer for Certicom Corp. has won the thumbs-up from the security software maker's board of directors.
Certicom said Thursday its board has determined that the $3-a-share bid RIM unveiled Tuesday – worth $131-million in all and double its initial bid – is superior to the $2.10-a-share offer from California-based Verisign Inc.
Certicom said it had informed Verisign of the board's ruling Wednesday and that the U.S. company has five business days in which to decide whether to improve its takeover offer. Verisign is entitled to a $4-million break fee if it decides to walk away.
The news came as, in a separate development, the Ontario Securities Commission is poised to issue a decision on a proposed settlement of a legal battle over an improper compensation scheme expected to cost key RIM executives and directors tens of millions of dollars in penalties.
Certicom, based in Mississauga, Ont., makes vital software that RIM uses to make communications via its BlackBerry devices secure.
Analysts have said RIM, of Waterloo, Ont., had little choice but to boost its offer for the software maker, whose products also are used by such rivals in the smart-phone business as Motorola Inc., Texas Instruments Inc. and International Business Machines Corp.
“I didn't think RIM would take it lying down because Certicom technology is absolutely integral to the BlackBerry platform,” said Carmi Levi, an independent technology analyst based in London, Ont., told The Globe and Mail Tuesday.
“[Certicom's] encryption technology is fundamental to the security of every BlackBerry on the planet and every BlackBerry that's likely to come. It's apparent by this second offer that RIM is going to fight tooth and nail to ensure that it controls Certicom's future and not someone else.”
Certicom dismissed RIM's initial bid as “opportunistic” and went to court to have it blocked, arguing that the move contravened non-disclosure agreements signed by RIM in 2007 and 2008.
Madame Justice Alexandra Hoy of Ontario Superior Court ruled in Certicom's favour Jan. 19, although her ruling did not prevent RIM from entering into friendly takeover negotiations with its target.
Certicom was founded in 1985 and, at the height of the technology boom in 2000, its shares were at one point trading for more than $120.
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