Safran's proposed $300 million offer for Digimarc possibly superior to deal with L-1 Identity Solutions

By Lisa Kerner

Charlotte, N.C., June 23 - Digimarc Corp. said it received an unsolicited non-binding indication of interest from Safran SA to acquire the outstanding common stock of Digimarc, following the spinoff of Digimarc's digital watermarking business and cash on hand, for $300 million in cash.

According to Digimarc's board of directors, the Safran offer could reasonably be expected to lead to a superior proposal as defined in Digimarc's merger agreement with L-1 Identity Solutions, Inc., which remains in effect.

The Safran offer is subject to completion of due diligence and negotiation of customary definitive documentation similar to Digimarc's March 23 agreement with L-1, a Digimarc news release stated.

L-1 agreed to acquire Digimarc's Secure ID business in a stock and cash transaction valued at approximately $263 million.

The Digimarc board authorized the company to provide Safran with information to enter into discussions with the company regarding its proposal.

L-1, in response to news of the new offer, said it believes its transaction provides superior value to Digimarc's stockholders as compared to the non-binding, conditional Safran proposal.

"We believe that our offer is superior and that the best interests of customers and Digimarc shareholders are best served with a U.S.-based company such as ours that has the strongest biometric and authentication technologies and services in the industry," L-1 chairman and chief executive officer Robert V. LaPenta stated in a company news release.

LaPenta noted that placing the credentialing of U.S. citizens in the hands of a foreign entity raises questions about national security and would not be preferred by the U.S. government.

The Federal Trade Commission already granted early termination of the Hart-Scott-Rodino waiting period in the proposed merger of L-1 and Digimarc, L-1 noted.

L-1's identity solutions are designed to protect personal privacy. The company is based in Stamford, Conn.

Digimarc is a secure identity solutions provider based in Beaverton, Ore.

Based in Paris, Safran engages in the aerospace propulsion, aircraft equipment, defense security and communications businesses.

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