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Microsemi announces formal bid to buy Zarlink

Posted: 19 Aug 2011 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition? mixed-signal IC? takeover bid?

Microsemi Corp. has announced its intentions to buy Zarlink Semiconductor Inc. Microsemi is offering $3.41 (3.35 Canadian dollars) for each common share of Zarlink and about $1,393.89 (1,367.35 Canadian dollars) for every $1,019.52 principle amount of Zarlink convertible debt.

The offers represent a 40 percent premium over the closing price of Zarlink's shares on July 19, the day before Microsemi announced a takeover bid for the firm, and a 24 percent premium over the closing price of the debentures of Zarlink on the Toronto Stock Exchange on the same day, said Microsemi.

"We are committed to building and strengthening Zarlink's business, and believe our offers provide a superior outcome for Zarlink's shareholders, debenture holders, employees, customers and the local economy," said James Peterson, Microsemi's president and CEO, in a statement. "We believe this proposed acquisition provides considerable growth opportunities, and greatly benefits the security holders of both companies."

Peterson said Microsemi was "disappointed by Zarlink's board of directors' insistence on placing onerous restrictions on Microsemi" that would have prevented the company presenting its offers to Zarlink's shareholders and debenture holders.

"Under these circumstances, and in the absence of a more attractive alternative, Microsemi is compelled to take its offer directly to shareholders," Peterson said.

The offers will be open for acceptance until 5 p.m. Toronto time on Sept. 22, unless extended or withdrawn, Microsemi said.

Microsemi bid too low
Zarlink has acknowledged that it has received the unsolicited bids from Microsemi and said that the bids have all been rejected because they undervalue the company. Learn more about the Microsemi-Zarlink takeover plans.

Last July, Microsemi previously announced an offer to acquire Zarlink for this time worth $548.7 million. Zarlink's board of directors subsequently rejected the bid, saying it was too low. Zarlink's board later adopted a "poison pill" in an apparent attempt to thwart Microsemi's hostile takeover bid.

Microsemi previously made two other offers to acquire Zarlink, both of which were rejected by Zarlink's board of directors.

Zarlink issued a statement advising shareholders and debenture holders not to take any action concerning the Microsemi offers until they have received further communications from Zarlink's board. The company's board will be issuing an official communication in accordance with applicable securities laws which includes the board's recommendation on the Microsemi offer, Zarlink said.

Zarlink said Microsemi has chosen not to participate in Zarlink's strategic review process in response to the offer. "Zarlink is disappointed that, despite its repeated invitations, Microsemi has declined to participate in Zarlink's strategic review process on reasonable terms that favor the best outcome for Zarlink and its stakeholders," Zarlink said.

- Dylan McGrath
??EE Times

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