UPDATE 3-Certicom favors RIM's richer takeover bid

* RIM raises bid to C$3 a share in cash

* Trumps VeriSign's offer of C$2.10

* VeriSign has Feb 11 deadline to make new bid (New throughout. Changes dateline, previous TORONTO)

By Susan Taylor

OTTAWA, Feb 5 (Reuters) - Security software maker Certicom Corp CIC.TO said on Thursday that BlackBerry maker Research In Motion (RIM.TO) (RIMM.O) had tendered a superior bid to VeriSign Inc (VRSN.O), the latest move in a takeover tug-of-war.

RIM's second sweeter cash offer of C$3 a share values the cryptography company at about C$131 million ($106.5 million) and significantly trumps VeriSign's C$2.10 per share bid. It also doubles RIM's initial hostile offer, made in December.

Internet security provider VeriSign has until Feb. 11 to submit an amended offer under its arrangement with Certicom, whose technology has been adopted by the U.S. National Security Agency for government communications.

A counter-bid from VeriSign is unlikely, said Blackmont Capital analyst Lawrence Rhee, because RIM's richer offer shows its commitment to acquire Certicom.

"They could notch it up higher, but I just think VeriSign thinks that RIM will come and outbid it again. So why go through that process," Rhee said.

"I think they're both motivated to try and purchase this asset, it's just I think RIM has proven that they want it more."

Shares in Certicom rose nearly 1.6 percent in early trade on the Toronto Stock Exchange on Thursday to C$3.21, suggesting that some investors believe a richer offer could come.

VeriSign will receive a C$4 million termination fee if Certicom does not accept its bid.

Late last month, Waterloo, Ontario-based RIM dropped its initial C$1.50 a share offer after Certicom got a court injunction blocking the bid. Certicom alleged RIM had violated nondisclosure agreements by using confidential information for its bid.

It marked a sour point in a long-standing relationship between the two companies. Certicom's technology is of key importance to RIM's security platform, Rhee said.

"One of RIM's competitive advantages since inception has been the strength of their security. That's why many governments, especially the U.S. government, use BlackBerrys. Because BlackBerrys have never been compromised," the analyst said in an interview.

"I wouldn't say it's all Certicom's technology that explains the strength of the security around RIM. I think it's a key component."