Cypress dismisses buyout proposal

Chapman Capital L.L.C. announced that it has been contacted by the chairman of Cypress Semiconductor Corp. in response to the investment firm's demands that the chip maker should seek a leverage buyout.

Robert Chapman, managing member of Chapman Capital, claimed that Cypress dismissed the proposals. Recently, the hedge fund wrote letter to the board of Cypress Semiconductor, urging the company to reorganize itself and become a private company through leveraged buyout.

The investment firm also claims that Cypress engaged Credit Suisse to represent Cypress in buyout discussions valued at $1.8 to $2 billion, but said the chip maker did not follow through on the proposal—which equated to a loss for shareholders.

"Cypress' virtually ownership-free board of directors shall not be allowed by its frustrated shareholder base to hide behind weak and vague excuses for failure,'' Chapman said in a statement.

''As has been the case arguably for two decades, we anticipate that Cypress's enfant terrible CEO T.J. Rodgers will present on January 25th a plethora of pretexts for Cypress's failure to eliminate the 'Rodgers Discount' via a change-of-control transaction involving the likes of Texas Pacific Group, Blackstone Group or Silver Lake Partners,'' he said.

''However, given that the board and its hired servant Bradley Buss reportedly have failed to exert even minimalist effort to resolve tax complications by calling Wall Street's leading reorganization tax specialist, Lehman Bros.'s Robert Willens, despite his having published a Cypress-SunPower tax resolution over three months ago, they should not expect Cypress's owners to sit idle and allow [Cypress] to fumble yet another share-maximizing opportunity," he said.

- Richard Goering
EE Times