Certicom Corp. (TSX: T.CIC, Stock Forum) announced Monday that it has applied to the Ontario Superior Court of Justice for an injunction to stop the $1.50 hostile take-over bid made by a wholly-owned subsidiary of Research in Motion (TSX: T.RIM, Stock Forum).
Certicom notes that it will also be making an application to the OSC for an order to cease trade the RIM offer.
Earlier this month, shares of Certicom, which provides cryptographic technologies for software developers, government and corporate clients, surged after RIM announced that it intended to make an offer to acquire all of the issued and outstanding shares of the company.
The total acquisition cost was expected to be approximately $66 million, with RIM offering $1.50 cash per Certicom Share.
In its application to the court, the company says it “contends that RIM's access to Certicom's confidential information and its use of that information in connection with RIM's $1.50 hostile takeover-bid 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.”
Certicom adds that it “believes that the material in RIM's take-over bid circular misleads Certicom shareholders as they attempt to make an informed decision as to whether to retain their Common Shares or tender them to the $1.50 offer.”
In a statement Monday, RIM said it “intends to vigorously oppose Certicom's allegations.”
Also on Monday, Certicom said that its board of directors is advising its shareholders to reject the offer.
The company says its board is “continuing to conduct a value maximization process that is designed to facilitate the proposal of superior alternatives from qualified third parties.”
Shares of Certicom climbed 4.6% to $1.80 Monday.
On the Certicom Bullboard Monday, fishtail said:
cease trade order won't work. rim will up its bid (slightly), but only **IF** required. again, I don't know and wonder about how tightly controlled cic is, so the cease trade order is likely an attempt to rally the shareholders not to jump ship in this crappy market (CIC will drop like the rest of them without RIM or any other deal in the works... cic's only option now is to solicit a better deal with someone else (unfortunately, in this market, the bid will be higher, but not that much higher since everybody is down relative wise). Then, to make any possible counter deal possible, CIC management would have to 1) sign some kind of "poison pill" break-up fee; and 2) make the case to shareholders as to why any potential non-RIM deal is better. However, I don't expect anybody to turn around and counter offer that much more than RIM, but only enough to solidify a deal with some kind of twist like 1) above...[sic]
