Obrem Capital Management has agreed to continue to be an investor in semiconductor maker Micrel despite its failure to get shareholder support for its board representation, chairman Ray Zinn, said in a statement.
Shareholders of Micreal Inc at a special meeting rejected Obrem Capital's proposals to remove Micrel's current board and replace them with its nominees as well as a proposal to rescind the company's shareholder rights plan.
A statement issued by California-based Micrel Inc's chairman Ray Zinn said the shareholders rejected all of the proposals made by dissident shareholder Obrem Capital Management the company's recent shareholders' meeting, in which it sought to oust its current board and replace it with its own members.
''The strong support extended by shareholders indicate their commitment to the company. After the special meeting, members of Micrel's board of directors met Andrew Rechtschaffen and Eric Gomberg of Obrem Capital. At the meeting, Rechtschaffen expressed his willingness to be a long term investor in Micrel,'' Zinn added.
"The meeting with Obrem management was open and friendly. Rechtschaffen indicated his intention to be a long term investor in Micrel. Both Obrem and the board are committed to moving forward in a positive way. We look forward to continuing the productive dialogue we enjoy with all of our shareholders," Zinn said.
Raymond D. Zinn is a co-founder of the company and has been its president, chief executive and chairman of its board of directors since the company's inception in 1978.
''We believe the results of the vote reflect a clear rejection by Micrel shareholders of Obrem's attempt to take over Micrel and force an immediate sale of the company,' Micrel said in a statement. ''We also believe it sends a clear message that shareholders want Obrem to discontinue its singular, disruptive agenda at Micrel.''
Obrem, in an April 2 release, said Micrel's board was ''unable to create permanent value'' for the shareholders, and a sale of the company was the best near and long-term outcome for Micrel.
Mercel countered with a statement on April 25, urging its shareholders to reject the slate of nominees, calling them ''inexperienced'' and looking to sell the company ''in the face of the most challenging market conditions the industry has seen in years.''
Obrem's nominees ''would put Micrel at risk of significant business damage,'' Micrel warned.
Micrel cliams an excellent record of revenue growth and sustained profitability since its inception in 1978. The company has posted year-over-year revenue growth in 23 out of 26 years and been profitable in 25 of its 26 years of its existence. It has also consistently generated positive cash flows since going public in 1994, it said.
Micrel's net revenues have, however, stagnated since 2004, and were $258 million in 2007, against $276 million in 2006 and $258 million in 2004. Operating profit declined in 2007 to $47.57 million from $57.78 million in 2006.
Obrem owns roughly 10.7 million shares, or roughly 15 per cent, of Micrel and needs to protect that investment. And though it prevailed in the shareholder vote, Micrel knows a nasty proxy battle is bad for the company. It remains unclear if Micrel will still consider selling the company.
Obrem said it is discussing opportunities to enhance shareholder value with the company. The shareholder called its meeting with Micrel directors "positive and constructive."
Micrel Inc is a leading global manufacturer of IC solutions for the analog, Ethernet and high bandwidth markets. The company's products include advanced mixed-signal, analog and power semiconductors; high performance communication, clock management, Ethernet switch and physical layer transceiver ICs.
Its customers include leading manufacturers of enterprise, consumer, industrial, mobile, telecommunications, automotive, and computer products.
Based in San Jose, California, the company has regional sales and support offices and advanced technology design centers throughout the Americas, Europe and Asia. The company also maintains an extensive network of distributors and reps worldwide.