Takeover bids are expensive business.
Wi-LAN Inc.'s failed hostile takeover of Mosaid Technologies cost shareholders about $10-million, Wi-LAN said on Wednesday.
Wi-LAN said total costs actually ran to $14-million, or roughly half the company's revenue in the most recent quarter, but gains on the sale of the Mosaid shares that Wi-LAN owns will cut the net cost to $10-million.
Ottawa-based Wi-LAN launched a hostile takeover battle for rival Mosaid in a bid to merge Canada's two main patent enforcement companies. Mosaid found a white knight in the form of Sterling Partners, a U.S. private equity firm willing to pay more and Wi-LAN dropped out.
The costs include legal, accounting and adviser fees. There's also commission and interest on a bond deal that Wi-LAN did to raise money for the transaction. Under Canadian takeover rules, a hostile bid must be fully financed, so Wi-LAN did a $230-million bond sale in September. It was a creative solution. The bonds would be extendible if Wi-LAN got Mosaid, and come due in just a few months if it didn't. Those bonds will now be redeemed.
Wi-LAN said it will spread the costs over three quarters.
That cost pales in comparison to what TMX Group Inc. shareholders are on the hook for. The bill for TMX's takeover drama stands at $31.5-million over the past nine months, according to the company's earnings report on Tuesday.
TMX has racked up the costs trying first to merge with London Stock Exchange Group Plc, then fighting a hostile bid from a group of Canadian firms known as Maple, then negotiating with Maple to find a friendly deal.