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Zilog receives new buyout proposal

Posted: 20 May 2008 ?? ?Print Version ?Bookmark and Share

Keywords:buyout proposal? power IC? DSP?

Power semiconductor company Ixys Corp. has made and unsolicited proposal to buy all the outstanding shares of DSP manufacturer Zilog Corp. for $4.50 in cash and stock.

In March, Ixys acquired 848,256 shares, or approximately 5 percent, of the outstanding Zilog common stock. Zilog has also been approached by two other firms about an acquisition.

Below is a partial text of the letter that Ixys sent to Zilog's boad:

Ixys Corp. would like to enter into exclusive negotiations to acquire Zilog. Our cash and stock proposal represents a fair market value for the company consistent with prior proposals, recognizing the value of the company notwithstanding recent quarters of underperformance.

It is readily apparent to us as a shareholder, as well as to your other shareholders, that Zilog has unperformed as an independent company. Zilog's March 2008 fiscal year results did not meet analysts' or the market's expectations. There is growing market sentiment that although Zilog has invested in technologies, the company is not converting these technologies into strong sales. Recent efforts by Zilog to infuse new blood into its sales and marketing team have yet to meet with success. We believe it would be in the company's best interests to enter into merger discussions with a growing, global semiconductor company.

A merger with Ixys will offer the best opportunity for your shareholders, employees and customers, as such transaction would provide Zilog shareholders with immediate liquidity at a premium to the average six-month share price. Additionally, Zilog shareholders would have an ongoing equity stake in the combined company, thereby providing them with the opportunity to benefit from the significant upside potential of the combined entity.

- Mark LaPedus
EE Times

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