BREAKING NEWS..MAJOR NEW..French Govt and private equity firms offer to buy patents
future revenue licensing for 25% of ALU's 29k patents
Out on dow jones..
French Govt, Private Equity Firms Make Offer for Alcatel Lucent Patents-Report
Last update: 2/1/2013 5:30:57 AM
The French government and private-equity funds have offered to buy future license revenue for a bundle of Alcatel-Lucent SA (ALU.FR) patents, French newspaper Les Echos reported Friday, without citing sources.
The potential deal, through a government-owned entity founded to invest in patents, is part of a government effort to bolster the telecommunications-equipment maker, the newspaper reports.
Les Echos added that the deal would cover a quarter of Alcatel-Lucent's 29,000 patents, principally in the wireless space, without specifying financial terms of the offer.
A spokesman for France's finance ministry didn't immediately have any comment. A spokesman for Alcatel-Lucent declined to comment.
The Franco-American company has been under pressure for years, posting inconsistent profit and burning cash amid cutthroat competition, particularly from China's Huawei Technologies.
In order to buy time for a restructuring, the company agreed in December to mortgage assets--including its patent portfolio--to a consortium of banks. The deal raised concern among French government officials that the country could lose valuable patents to foreign banks.
Bloomberg revealed that Alcatel-Lucent's patents could be worth double the $4.5 billion that Nortel Networks' licences sold for in a bankruptcy auction in June.
Rather than focusing on Alcatel's money-losing operations, investors should be "looking at the next piece, which is a very large patent portfolio that has actual value that's being undervalued by the public market," said Alkesh Shah, an analyst with New York-based investment advisors Evercore, in an interview with Bloomberg. "The patent portfolio is one of the hidden assets of value that I don't think investors have paid much attention to."
This viewpoint has prompted speculation that Alcatel-Lucent could be valued significantly higher if its business units were valued separately or sold off, with Evercore suggesting a $20 billion sale price for the entire company. However, French labour regulations make takeovers difficult, although the 18,800 U.S. patents it holds could be enough to tempt some to try.
Commenting on the patents held by Alcatel-Lucent, Chris Marlett, CEO of MDB Capital, a U.S. firm specialising in intellectual property, said that the company has 14,000 approved patents as well as submitted applications for 4,800 more. Alcatel inherited Bell Labs, and its patents, with the acquisition of Lucent.
"Companies are just now waking up to the value of IP," said Marlett. "When you look at Alcatel, they have one of the largest patent portfolios out there. Alcatel-Lucent is definitely one of those companies that has the opportunity to monetize a lot of it."
Actually, no one is offering to buy the patents. From a variety of news sources, the reported offer follows:
"The French government and private equity funds OFFERED TO BUY FUTURE LICENCE REVENUE FOR A PORTION OF ALCATEL-LUCENT'S WIRELESS PATENTS, according to a Les Echos report, which did not name its source."
So not only are they buying any patents, they are also only buying the licensing revenue from a portion of the patents.....which is a far cry from "French Govt and private equity firms offer to buy patents"