CR Micro revises terms for US chipmaker Fairchild
30 Dec 2015
China Resources Microelectronics (CR Micro), a unit of diversified industrial group China Resources Holding Co, yesterday revised its unsolicited offer for US chipmaker Fairchild Semiconductor International Inc, by amending certain break fee conditions.
In a statement, Fairchild confirmed that it has received a revised offer from Party G Group, which has been identified by some unidentified sources as CR Micro.
The new proposal includes revised termination fees in the event that the deal fails to win regulatory approvals.
The Chinese firm is at loggerheads with US firm ON Semiconductor Corp, whose November offer of $20 a share for Fairchild, has already been recommended by the Fairchild's board.
Although, CR Micro tabled its higher bid of $21.70 a share earlier in December, which values the company around $2.46 billion, the Fairchild management did not consider it as a superior offer.
''The unsolicited proposal received on 7 December 2015 to acquire Fairchild for $21.70 per share in cash would not reasonably be expected to result in a ''Superior Proposal'' as defined in Fairchild's agreement and plan of merger with ON Semiconductor Corporation,'' the company had stated.
Under the new terms, Party G would pay a termination fee of $72 million which Fairchild would owe to ON Semiconductor if it cancels the merger agreement and accepts the Chinese proposal. The group also provided a debt commitment letter from JPMorgan Chase & Co.
San Jose, California-based Fairchild is a maker of semiconductors for power management and also micro-electro-mechanical systems. Its products are used in diverse applications including industrial, home appliance, automotive, cloud computing, lighting and consumer electronics among others.
The Fairchild stock has risen over 50 per cent in the past three months, since initial rumours of a possible takeover spread in the market. The shares were traded at $20.01, up 0.15 per cent, yesterday on Nasdaq.
In the third quarter, Fairchild reported revenue of $342 million and a loss of $8.2 million. 2014 revenue was $1.4 billion. The company has a market capitalisation of $2.3 billion and a workforce of nearly 8,300.
The bids mark the latest move of consolidation in the semiconductor industry, which has set already set a record over $104 billion this year, compared to $46 billion last year, according to Dealogic data.
The latest linkup was U.K.-based Dialog Semiconductor's almost $5 billion deal for Atmel of San Jose, California, announced Sunday.
US chip giant Intel Corp completed its acquisition of Altera Corp for $16.7 billion two days ago. (See: Intel completes $16.7-bn deal for Altera)
In September, UK's Dialog Semiconductor offered $4.6 billion for Atmel of US. (Dialog Semiconductor to buy US peer Atmel for $4.6 billion)