C$66 million offer
Last modified on Thursday, 04 December 2008 09:04
Blackberry manufacturer, Research In Motion (RIM), has announced that it plans to make a direct takeover offer to the shareholders of Certicom Corporation. The offer is said to be worth C$1.50/share in cash and RIM is going directly to shareholders since it says it has been unable to move talks ahead with Certicom’s management. Certicom is provider of cryptography required by software vendors and device manufacturers to embed security in their products.
Adopted by the United States Government's National Security Agency (NSA), Certicom’s elliptic curve cryptography (ECC)-based solutions provide security per bit of any known public key scheme. The technology is ideal for constrained environments, such as mobile phones. Certicom’s security offerings are licensed to multinational technology companies, including IBM, General Dynamics, Motorola, Oracle and RIM. Certicom holds over 425 technology patents that could be of considerable benefit to RIM.
RIM decided to go directly to Certicom shareholders after talks stagnated with Certicom management. RIM indicated it began talks with Certicom management in February 2007 and has been conducting due diligence periodically since. RIM’s offer of C$66 million ($52 million) is a 76.5 percent premium over Certicom’s stock closing price on December 2nd, according to RIM.
The bid is not subject to financing conditions and will be paid for by cash on hand, according to RIM. RIM said that it plans to formally begin the offer by December 12th after receiving a shareholder list from Certicom.
RIM Co-Chief Executive Jim Balsillie issued a statement that said, "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 now." RIM’s bid will be open for 35 calendar days from its mailing date to shareholders and will require a two-thirds majority approval to be valid.
Certicom, which is also located in the same area of Ontario, Canada as RIM, indicated that there are several parties who have expressed unsolicited interest in potential transactions with Certicom and that it is exploring these options through a special committee at the company.
Certicom’s stock rocketed 76.5 percent in opening trade on the Toronto Stock Exchange on Wednesday to C$1.50 as a result of the announcement by RIM, while RIM shares fell 2 percent to C$45 in Toronto and 3.3 percent to $36.09 on the NASDAQ.