BlackBerry bid for hostile takeover stoppedJanuary 20th, 2009 - 12:18 pm ICT by IANS
Toronto, Jan 20 (IANS) A Canadian court has stopped BlackBerry maker Research In Motion (RIM) from making a hostile bid for takeover of its security technology supplier Certicom Corp. Headed by Indian-origin Karna Gupta, Certicom is an encryption company based at Mississauga on the outskirts of Toronto.
A world leader in encryption software, Certicom supplies wireless security technology to RIM and others.
This wireless security technology is used to encrypt mobile data to build secure messaging systems.
In fact, it is this technology which has made BlackBerry the darling of government officials and corporate honchos for secure transfer of messages and data.
Last year, the BlackBerry maker made a $66-million “unfriendly” offer directly to Certicom’s shareholders for its takeover to get exclusive access to encryption technology.
RIM made the direct offer to Certicom shareholders after it failed to take over Certicom through talks with its management.
Certicom sought a court injunction on the grounds that RIM has violated non-disclosure agreements signed by the two sides during the takeover talks.
Passing her order Monday, Judge Alexandra Hoy said: “The use of the confidential information provided pursuant to the two non-disclosure agreements at issue … to assess the desirability of a hostile takeover bid breached those agreements.
“RIM shall be enjoined from taking any steps to advance the hostile takeover bid launched by them on Dec 10, 2008.”
The BlackBerry maker had started takeover talks with Certicom in 2007.
With a secure messaging system as its trump card globally, the BlackBerry maker has been eyeing Certicom to have exclusive access to its security technology.
In a statement after the court order in favour of Certicom, RIM said it is considering alternatives available to it.
RIM said it is disappointed by “the actions of Certicom’s directors in pursuing court proceedings”.
As a result of the court order, RIM said, Certicom shareholders will not be able to accept its offer, “and if another offer materializes for Certicom, RIM cannot, without Certicom’s prior written consent, participate in an auction for Certicom”.
The BlackBerry maker said it may appeal against the court order.
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Tags: certicom, corporate honchos, court injunction, court proceedings, gupta, hostile bid, hostile takeover, indian origin, messaging system, messaging systems, mobile data, non disclosure agreements, outskirts, research in motion, security technology, takeover bid, takeover talks, technology supplier, trump card, wireless security