DJ CORRECT: Wi-Lan To Launch C$480 Million Hostile Bid For Mosaid
("Wi-Lan To Launch C$480 Million Hostile Bid For Mosaid," at 6:01 p.m. EDT, misstated the nature of the Nortel patent deal in the third paragraph. The correct version follows:)
--Bid offers another example of value of patents
--Highlights importance of size in patent wars
--Mosaid said it will comment in due course
By Ben Dummett Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Wi-Lan Inc. (WILN) said Wednesday it plans to launch a hostile C$480 million bid to acquire rival patent-licensing company Mosaid Technologies Inc. (MSD.T), in another sign of the increasing importance of patents as a source of revenue and protection in the technology sector.
Wi-Lan´s announcement of its C$38-a-share bid comes on the heels of Google Inc.´s (GOOG) $12.5 billion deal to acquire Motorola Mobility Holdings Inc. (MMI) and its trove of patents as a way to fend off potential litigation by rivals and to facilitate settlement negotiations over patent disputes.
The Google-Motorola transaction and the purchase earlier this summer of Nortel Networks Corp.´s (NRTLQ) coveted wireless patents for about $4.5 billion by a consortium that includes Microsoft Corp. (MFST), Apple Inc. (AAPL) and Research In Motion Ltd. (RIMM) also demonstrates the importance of size to compete for patents.
Ottawa-based Wi-Lan has over 790 issued and pending patents covering wireless, wireline, and V-Chip technologies, which allows users of digital television receivers to filter out programs they consider inappropriate. By buying Mosaid, its cross-town rival, Wi-Lan would acquire a much larger patent portfolio of 2,822 patents and applications covering semiconductor and telecommunications technologies.
"Combining the patent portfolios will provide a more efficient and rapid path to establishing a larger and more valuable aggregate portfolio given the combined management team´s expertise and increased business scale," Wi-Lan said in a statement. It will also allow the combined entity to access capital to grow the business and fund litigation to enforce its patents, if necessary, Wi-Lan said.
"I am a big proponent that bigger is better in this industry," Jim Skippen, Wi-Lan´s chief executive and former Mosaid executive, said in a telephone interview. He joined Wi-Lan in 2006 from Mosaid where he held positions, including senior vice-president, patent licensing and general counsel.
A Mosaid spokesman said the company will respond to Wi-Lan´s announcement in "due course." Mosaid is scheduled to report its fiscal first-quarter results next Thursday.
Wi-Lan´s offer represents about a 25% premium to Mosaid´s 10-day volume weighted average stock price. In Toronto Wednesday, Mosaid closed up 0.48% at C$31.65. Wi-Lan ended the session up 2.90% at C$7.09.
Wi-Lan said it is launching a hostile bid after failing on several occasions over the last several years to enter into friendly agreement with Mosaid.
Skippen declined to be more specific about these attempts and the Mosaid representative declined comment.
Wi-Lan doesn´t have agreements with any of Mosaid´s shareholders to support its hostile bid.