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Mosaid asks shareholders to reject Wi-Lan hostile bid

Tags: Mosaid, Wi-Lan
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Mosaid Technologies (MSD-T) on Wednesday asked shareholders to reject a hostile $480 million takeover bid from Wi-Lan Inc. (WIN-T) after the patent licensing company's board said the offer was inadequate.

Ottawa-based Mosaid, which signed a deal to acquire Nokia and Microsoft patents last week, did not say whether it would seek higher bids -- unusual for a company facing a hostile takeover attempt.

"Even before Mosaid acquired the Core Wireless patents, Wi-Lan's offer was clearly inadequate and highly opportunistic -- it is only more so now," said Mosaid Chairman Carl Schlachte.

Wi-Lan, which develops and licenses intellectual property for the communications and consumer electronics markets, made a $38-a-share offer for Mosaid in late August. The bid underscores the global race for technology patents to use as weapons in litigation and in cross-licensing.

Mosaid shares closed at $41.20 a share on Tuesday and have been trading above WiLan's $38-a-share offer price, suggesting the market expects a higher bid to emerge.

Mosaid announced a deal last week to acquire about 2,000 Nokia and Microsoft wireless patents, saying the deal would bring revenues exceeding all of the $1 billion generated since the company's formation in 1975.

Bank of Montreal analyst Brian Piccioni said in a report the patents added $17 a share to his fundamental valuation of Mosaid. He raised his price target on the stock to $49 a share from $40.

"The Wi-Lan offer fails to adequately compensate Mosaid shareholders for Mosaid's prospects for significant growth and shareholder value creation," Mosaid said on Wednesday.

Mosaid said its largest shareholder, Mawer Investment Management Ltd., and all of its directors and officers -- holding some 16.7 percent of the company's stock -- had rejected the offer.

Mosaid also said the Wi-Lan offer values it below its peer group, and said it was not a firm offer because it gave Wi-Lan the option not to proceed.

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