Wi-Lan Inc. (WIN), the patent holder that suffered a setback last week when Apple Inc. (AAPL) won an infringement trial, said it will explore “strategic alternatives” including a possible sale of the company.
Wi-Lan will consider changes to dividend policy or other forms of return of capital, as well as “the acquisition or disposition of assets, joint ventures, the sale of the company, alternative operating models or continuing with the current business plan,” it said today in a statement.
Wi-Lan rose rose 4.5 percent to C$3.24 at 10:26 a.m. in Toronto today. The Ottawa-based company has lost 21 percent since Apple won a patent-infringement trial on Oct. 23 and fended off a demand for $248 million in royalties for wireless technology used in mobile devices. Wi-Lan holds about 3,000 patents and relies on royalty payments for all of its sales.
“The company strongly believes in its current business strategy but does not believe that its current share price accurately reflects its strong balance sheet, the value of its signed license agreements, its business prospects or the residual value of its broad intellectual property portfolio,” it said.
The board has a wide range of alternatives including distributing capital to shareholders, Justin Kew, a Toronto-based analyst with Cantor Fitzgerald, said in a note to clients today.
The company could pay out at least $60 million, or about 50 cents a share, or more, Kew said. He maintains a buy recommendation and a $4.80 target price. The stock has five buys, two holds and two sell ratings, according to data compiled by Bloomberg.
Canaccord Genuity is serving as financial adviser to Wi-Lan and Norton Rose Fulbright Canada LLP is serving as legal adviser, the company said. Wi-Lan hasn’t set a timetable for completing the review initiated by the board, it said.
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