Loeb Partners Corp., a New York-based activist hedge fund, has submitted a letter to intellectual property (IP) licensing company Mosaid Technologies Inc.'s board of directors, proposing that the company be sold.

In a harshly worded letter to the company dated Aug. 15, Loeb stated that Ottawa, Canada-based Mosaid is "at an important strategic inflection point in light of the fact that the company has licensed the better part of the commodity DRAM industry." DRAM is known as a volatile market and one that is repeatedly troubled by lawsuits. Loeb currently owns 6.06 percent of Mosaid's outstanding shares.

Specifically, Loeb believes that Mosaid’s product business is without value, but that its IP division could be salvaged if sold. The hedge fund asserted in its letter that currently, "shareholders are left to wonder about a ship being captained by individuals that have as of yet not been able to recognize failure on the product development side. Mosaid is not a successful product company, and so it should sell or shutter its product businesses to clear the path for a sale of the IP division."

The letter further calls for Mosaid's board and management team to clear the way for a sale of the company to the highest bidder. If Mosaid does not act on Loeb's suggestions, the hedge fund has threatened to lead a mutiny of sorts, engaging in a proxy fight to replace the board's directors with "shareholder representatives who will take to heart the need to maximize shareholder value."

This is the latest plague on the company, although a different problem than the norm for Mosaid. Often plagued by lawsuits, Mosaid most recently took Micron Technology, Powerchip Semiconductor and ProMOS Technologies to court for alleged infringement of nine of its United States patents.

Loeb seeks a response from the company by Aug. 24, when Mosaid will announce its fiscal Q1 2007 earnings. In a statement, Mosaid said its board has established a special committee to handle the matter.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved