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Pericom says yes to Diodes offer

Posted: 11 Nov 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Pericom Semiconductor? Diodes? Montage Technology? acquisition?

Pericom Semiconductor Corp. has revealed that its board of directors approved the revised offer from Diodes Inc. to acquire Pericom for about $413 million. The revised offer is worth $17.75 per share, a 46 per cent premium over Pericom's closing price on Sept. 2, the day before the original acquisition deal was announced. Pericom also indicated that the revised offer exceeds Pericom's five-year trading high by eight per cent.

Pericom has been mulling two acquisition offers. The firm had previously agreed in September to be acquired by Diodes for about $400 million. But last month, analogue and mixed signal chip vendor Montage Technology Group Ltd made an unsolicited offer to acquire Pericom for about $435 million. Pericom's board unanimously voted to reject the offer from Montage, citing financing and regulatory risks.

"The new offer from Diodes provides even greater cash value to Pericom's shareholders and further strengthens an already compelling offer that comes with fully committed financing and the ability to close in a matter of days following shareholder approval of the transaction," said Alex Hui, Pericom's chair, president and CEO.

Pericom also announced Monday that Institutional Shareholder Services Inc., a proxy advisory firm, has issued detailed reports recommending that Pericom shareholders vote in favour of the Diodes offer, which Pericom noted is backed by fully committed financing from Bank of America. Pericom said it was engaged for months in acquisition talks with Montage and that Montage consistently failed to meet deadlines and has been unable to secure committed financing to fund the potential acquisition.

In a letter to shareholders, Pericom summarised the Institutional Shareholder Services. "The terms of the Diodes transaction provide shareholders with the greatest value certainty," Institutional Shareholder Services wrote.

Pericom also said the Diodes deal could close within a matter of days after shareholder approval with no regulatory approvals required. Since most of Montage's assets are located in China, Pericom's board believes a deal to be acquired by Montage could face regulatory challenges.

The bidding war for Pericom comes amid a period of unprecedented consolidation activity in the semiconductor industry. In the first half of this year alone, the value of semiconductor acquisition deals was valued at about $72.6 billion, more than six times the annual average for M&A deals struck during the five previous years, according to market research firm IC Insights.

- Dylan McGrath
??EE Times

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