Certicom rejects RIM's bid, seeks to block it legally

Certicom three-month TSX trading

The target of a takeover bid from BlackBerry maker Research in Motion Ltd. said Monday that its board has rejected the offer, and it has gone to court to seek a regulatory ruling to block the proposal.

Mississauga, Ont.-based Certicom Corp. said the $1.50 a share bid by Research in Motion (RIM) doesn't provide fair value for the 91 cents a share of cash and equivalents Certicom has on hand. Moreover, the RIM offer undervalues Certicom's data-encryption technology and the company's new strategic plan "that is already showing signs of success."

All of Certicom's directors and officers "intend to reject the RIM offer," the company said in a news release recommending shareholders do the same.

Certicom has applied to the Ontario Superior Court of Justice for an injunction to block the bid, and will ask the Ontario Securities Commission for an order stopping the offer.

Certicom is also talking to other potential buyers, it said.

Certicom stock, which almost doubled to $1.59 a share after the RIM bid on Dec. 3, closed up eight cents to $1.80 in TSX trading. RIM fell $3.20 to $50.03.

Certicom said Waterloo, Ont.-based RIM used confidential information in making its bid, which "contravenes non-disclosure agreements signed by RIM in 2007 and 2008 with Certicom."

"Access to this information also provided RIM with a significant information and timing advantage relative to other parties that may have an interest in entering into an alternative transaction with Certicom."

Earlier Monday, RIM said it will fight Certicom's legal efforts to block the $66-million takeover.

"While this course of conduct is consistent with Certicom's past conduct in rebuffing RIM's overtures to conclude a negotiated transaction with Certicom, 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 a release.

RIM's $1.50-a-share offer represented a 76 per cent premium over Certicom's Dec. 2 closing price of 85 cents, RIM said. Certicom said the offer was "highly opportunistic" because it was launched in the middle of a market meltdown, when Certicom's shares were at a five-year low.

Certicom "is a natural fit for RIM," Jim Balsillie, co-chief executive of RIM, said at the time.