VeriSign offers $92M for Certicom

California-based VeriSign Inc. offers $92 million for purchase of Certicom

Certicom Corp. says it has reached a $92-million purchase agreement deal with California-based VeriSign Inc. that trumps the hostile bid that BlackBerry-maker Research In Motion was forced to withdraw by an Ontario court order.

Certicom, based in Mississauga, Ont., said the deal would see all of its outstanding common shares acquired for $2.10 per share by VeriSign, known for its encryption and identity verification technology,

The announcement comes days after Certicom won a court order preventing RIM of Waterloo, Ont., from making a hostile bid worth $66 million or $1.50 per share.

Certicom had maintained that RIM, a long-time customer that embeds encryption technology in its wireless email products, had undervalued the company and made its offer using privileged information shared between the two firms.

RIM argued the use of confidential information was permitted by those two non-disclosure agreements signed in 2007 and 2008.

An Ontario court judge backed Certicom's claim, and Waterloo, Ont.-based RIM withdrew its offer on Tuesday.

Certicom said VeriSign's offer represents a 40 per cent increase over RIM's proposed purchase price, as well as a 26 per cent premium on Thursday's closing stock price of $1.67 per share on the Toronto Stock Exchange.

"The special committee and the board conducted a thorough process on behalf of Certicom shareholders resulting in a significant increase in value for the company and its owners," Certicom board chairman Jeffrey Chisholm, said in a statement.

"We believe this transaction also represents a very promising opportunity for our customers and employees."

RIM didn't immediately respond to questions about whether it will return to the table with friendly counterbid.

Duncan Stewart, director of research and analysis at DSAM Consulting, said "everyone knows that RIM's first bid was opportunistic."

"Prior to the RIM bid, Certicom's share price was languishing."

Certicom supplies advanced encryption technology that prevents unauthorized access to wireless communications between devices, such as RIM's BlackBerry.

Certicom said the deal with VeriSign has received a unanimous recommendation from the company's board of directors and is set to close in March.
The sale, which is still subject to court and shareholder approval, will see Certicom's shares delisted from the Toronto Stock Exchange once completed.