Norsat International may accept U.S. bid over controversial Chinese takeover offer
Offer from Privet Fund Management LLC values it at $67.3 million US
Norsat International Inc., which is subject to a controversial takeover bid from a Chinese firm, says it may accept a better offer from an American investment fund.
The Vancouver technology company says the deal from Privet Fund Management LLC values it at $67.3 million US, which is slightly above the deal proposed by Hytera Communications.
Hytera, which manufactures radio transceivers and radio systems, made its friendly takeover offer last year and received clearance under the Investment Canada Act this month.
But its proposal has sparked a heated political debate over national security risks and the federal government's willingness to approve a Chinese takeover of a Canadian tech company.
Prime Minister Justin Trudeau defended his government Tuesday, saying Canada consulted the U.S., a major customer of Norsat's, before concluding that Hytera's takeover doesn't pose any national security concerns.
Yundong Yang, a spokesman for the Chinese Embassy in Ottawa, says the deal is a normal business transaction and shouldn't become politicized.
"From Canadian media's relative reports, in these commercial merger cases China is often regarded as an enemy that jeopardizes Canada's national security," Yang said in a statement. "Absurd thoughts like this totally go against the mutually beneficial co-operation between China and Canada."
There have been calls in the U.S. to review its dealings with Norsat and take a closer look at Hytera's takeover bid.
Norsat says Hytera has until Tuesday to match the offer of $11.50 US cash per share by Privet, which already owns about 17.6 per cent of Norsat's common stock. The Privet proposal is 2.2 per cent above Hytera's bid, and Norsat says that if Hytera doesn't come back with a better offer it intends to accept the Privet proposal.
Norsat shares dipped 15 cents on Wednesday, closing at $15 on the TSX.