Certicom says yes to RIM's sweeter offer

Research In Motion Ltd.'s much-sweetened takeover offer for Certicom Corp. has won approval from the security software maker's board of directors.

Certicom said yesterday its board has determined that the $3-a-share bid RIM unveiled on Tuesday - worth $131-million in all and double its initial bid - is superior to the $2.10-a-share offer from VeriSign Inc., based in Mountain View, Calif.

Certicom said it had informed VeriSign of the board's ruling Wednesday evening and that the U.S. company has five business days in which to decide whether to improve its offer. VeriSign is entitled to a $4-million break fee if it decides to walk away.

Certicom chief executive officer Karna Gupta said the company's board has held no direct discussion with RIM executives since VeriSign emerged as a bidder.

"Both of them would benefit from the underlying core technology," he said. "There is no natural advantage of one over the other in terms of integration. We are, as a company, at a very strong inflection point when you look at our results and the type of business that we are doing now, and people are paying a lot more attention to what we do."

Three top RIM executives agreed yesterday to a $77-million settlement will the Ontario Securities Commission over allegations of improper stock-option backdating.

Mr. Gupta said RIM's issues with the OSC did not factor into the board's discussions.

Certicom, based in Mississauga, makes vital software that RIM uses to make communications using its BlackBerry devices secure.

Analysts have said RIM, of Waterloo, Ont., had little choice but to boost its offer for the software maker, whose products also are used by rivals in the smart-phone business such as Motorola Inc., Texas Instruments Inc. and International Business Machines Corp.

Certicom dismissed RIM's initial bid as "opportunistic" and went to court to have it blocked, arguing that the move contravened non-disclosure agreements signed by RIM in 2007 and 2008.

Madame Justice Alexandra Hoy of the Ontario Superior Court ruled in Certicom's favour Jan. 19, although her ruling did not prevent RIM from entering into friendly takeover negotiations with its target.

Certicom was founded in 1985. At the height of the technology boom in 2000, its shares traded for as much as $120.