VeriSign Inc., of California today announced that it has lost it's appetite to pursue the Certicom Corp., paving the way for Research In Motion to takeover the Mississauga, Ont.-based encryption specialist.
Saying that it will not tender a counter offer to RIM's $131 million takeover proposal, VeriSign effectively put an end to a bidding war for Certicom which began in early December last year.
"Certicom found RIM's offer to be a superior proposal, and VeriSign decided not to match the offer," said Christina Rohall, spokesperson for VeriSign.
She said the company will not comment on the issue any further but gave indications that VeriSign was prepared to move on.
"VeriSign is focused on pursuing opportunities that are closely aligned to our core businesses, and we will do this in a strategic and disciplined manner," Rohall added.
A meeting of Certciom's Board of Directors will be convened later today at which it is expected to approve the RIM offer.
"If the Board of Directors approves the RIM Offer, Certicom will be in a position to enter into an arrangement agreement with RIM as contemplated by the Rim Offer after Certicom has made payment of a $4 million termination fee to VeriSign and terminated the VeriSign Agreement," according to a statement released by Certicom on Tuesday.
At least one Canadian technology industry observer lauded VeriSign's decision as a clever move.
"The decision to bail out at this early stage was a wise move on the part of VeriSign," according to Carmi Levy, independent technology analyst based in London, Ont.
VeriSign ran the risk of being locked into a protracted bidding war with RIM if it attempted to top RIM's latest offer of $3 per share, he said.
"After nearly losing Certicom, the size of RIM's offer indicates that it was determined to bag the company at all cost," Levy said.
The Waterloo, Ont.-based RIM initially offered $1.50 per share or $66 million for the purchase of Certicom. RIM, however, withdrew that bid, after an Ontario court issued an injunction against RIM.
VeriSign emerged as the leading bidder when it offered a friendlier bid of $2.10 per share or $92 million four days after on Jan. 23.
But by February, RIM sprang back on top with much friendlier $3 per share offer equivalent to about $131 million.