Security Vendor Seeks to Fight Off RIM Overtures
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Cryptography software vendor Certicom wants no part of Research in Motion. Instead, it wants the courts to stop a hostile takeover by the BlackBerry maker.
In a complaint filed yesterday with the Ontario Superior Court of Justice, Mississauga, Ontario-based Certicom claims RIM (NASDAQ: RIMM) is misleading shareholders about the acquisition opportunity. It also said its would-be buyer has breached non-disclosure agreements signed in the last two years between the two companies.
According to Certicom, RIM currently uses the 23-year-old company's Elliptic Curve Cryptography technology, which is also licensed to major tech firms, including IBM, General Dynamics, Motorola and Oracle.
The legal action is the latest news on RIM's $66 million bid, initiated in February 2007, to acquire the cryptography company. It presented a formal offer to Certicom shareholders on Dec. 8, offering $1.50 per share in cash -- a 76.5 percent premium over Certicom's closing stock price on Dec. 2.
At the time, RIM said its offer was fair and took into account growth prospects and synergies between the two partners.
Certicom, however, sees it differently.
In a statement yesterday, Certicom asserts that RIM's access to confidential data gave the BlackBerry manufacturer "significant information and timing advantage" that other potential purchasers did not have.
It also claims RIM has not told Certicom shareholders that it had access to confidential data and that it used that information in determining the share offer.
A second Certicom statement said the company's board of directors has unanimously advised shareholders to reject the bid.
"RIM's hostile bid undervalues both Certicoms valuable and unique industry-leading data encryption technology and the recent progress the company has made in implementing its strategic plan," the company said.
In a terse response yesterday, RIM said it is disappointed by Certicom's legal action.
"While this course of conduct is consistent with Certicom's past conduct in rebuffing RIM's overtures, RIM is disappointed that Certicom's directors are again attempting to keep the decision as to whether to accept RIM's offer out of Certicom shareholders' hands," RIM said in its statement.
"If the Certicom directors are of the view that there is any other material information that has not been disclosed to Certicom's shareholders, the Certicom directors should disclose such information in their directors' circular," the company said, adding that such information should be mailed to Certicom shareholders by year's end.
Spokespeople from both companies declined to comment beyond the statements.