Screen capture of Wi-Lan homepage.
Mosaid Technologies Inc.'s board is formally rejecting the unsolicited $480-million takeover offer from Wi-LAN Inc. , another patent licensing firm based in Ottawa.
The board says the offer of $38 cash per share is too low and doesn't reflect the value of Mosaid's future prospects.
The board's rejection had been widely anticipated. In announcing the offer on Aug. 17, Wi-LAN said it was going directly to Mosaid shareholders because the company's board had rebuffed overtures several times over the years.
Mosaid also bolstered its defensive position last week by announcing it will acquire control over about 2,000 patents and patent applications originally filed by mobile giant Nokia.
Under the deal, Mosaid is buying Luxembourg-based Core Wireless Licensing, which has a portfolio of 400 Nokia patent families. Mosaid will pay for the acquisition through royalties from future licensing and enforcement revenues.
"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 Carl Schlachte, chairman of the Mosaid board, said in a statement Wednesday.
Wi-LAN and Mosaid generate most of their revenue by licensing technology rights to large telecom and computer chip makers, which have recently demonstrated that they're willing to pay hundreds of millions or even billions for patents.
The value of patents has been highlighted by the auction of 6,000 patents from now-bankrupt Nortel Networks Inc.. A group including BlackBerry maker Research In Motion , and Apple Inc. paid $4.5-billion (U.S.) in June for the portfolio after a competitive auction.