RIM pulls bid for security vendor Certicom
- 22 January, 2009 08:08
Research In Motion pulled its hostile bid for security vendor Certicom on Tuesday, the day after a judge issued an injunction that halted the offer.
RIM first disclosed its hopes for acquiring Certicom in early December. It said the companies had talked but weren't able to engage in "meaningful dialogue," and so RIM planned to take its offer directly to Certicom's shareholders.
The offer of CDN$1.50 (AUD$1.8) per share, or about CDN$66 million, represented a premium of 76.5 percent over the closing price of Certicom shares on Dec. 2, the day before RIM announced it planned to make the bid.
Still, when Certicom formed a special committee to study the offer, it advised shareholders that the bid undervalued the company and wouldn't be in their best interest.
In addition, in late December Certicom asked Canada's Ontario Superior Court of Justice to stop the bid, charging that RIM had breached nondisclosure agreements in making its offer. The agreements were signed in 2007 and 2008 but RIM used information protected by them to create its bid, giving it a timing advantage over others that might have been interested in making an offer, Certicom said.
On Monday, the companies announced that the court ruled that RIM breached the agreements. The ruling meant that Certicom shareholders would not be able to accept the offer, RIM said.
While RIM initially said it was reviewing the court's decision and considering alternatives, including an appeal, on Tuesday the company announced it had withdrawn its offer because conditions of the offer couldn't be satisfied due to the court decision.
RIM already uses Certicom's Elliptic Curve Cryptography technology in its products, but acquiring the company would allow the BlackBerry maker to offer the technology more cost effectively and control its development.