Microsemi trumps Skyworks with $2.33-bn offer for PMC-Sierra
31 Oct 2015
Continuing a bidding war for PMC-Sierra Inc, a maker of semiconductors for network drives, US chipmaker Microsemi Corp has trumped a sweetened bid from rival Skyworks Solutions Inc with a $2.33-billion offer.
Microsemi's cash-and-stock proposal, which came just few hours after Skywork's latest offer yesterday, values PMC at $11.88 per share, which is over 2 per cent higher compared to the rival's revised proposal at $11.60 per share in cash.
Last week, Microsemi offered to acquire PMC for $8.75 in cash and 0.0736 share of Microsemi, which was worth about $11.50 per share.
"Our revised proposal offers superior value to PMC's shareholders, and Microsemi is uniquely positioned to realize significant synergies," said James Peterson, Microsemi's chairman and CEO, in a statement.
"Our offer is more strategic, offers more certainty in terms of closing approval process and timing, and at a higher price than the Skyworks proposal,'' he added.
Responding to Skyworks $11.60 per share cash bid, which was about 10 per cent higher than its previous $10.50 bid, the PMC board came out with a joint statement that Microsemi's earlier proposal is not superior and recommended the revised merger agreement with Skyworks to PMC shareholders.
The new agreement between Skyworks and PMC-Sierra includes a termination fee of $88.5 million, higher than the $70.0 million in the previous deal.
PMC has not commented on Microsemi's latest submission.
Santa Clara, California-based PMC is a semiconductor and software solution provider for cloud data centers and telecommunications, optical networks, and enterprises.
For the June quarter, PMC reported a loss of $8.5 million compared to a $3.5-million loss a year ago. Revenue was down almost 2 per cent at $125 million from $127 million last year.
Microsemi, based in Aliso Viejo, California, provides semiconductor and system solutions for communications and defence. The company plans to expand data center and cloud applications and achieve sales of $1.75 billion thorough the acquisition.
Woburn, Massachusetts-based Skyworks is a chipmaker and supplier to Apple Inc. The company reported revenue of $2.3 billion in 2014.
PMC shares rose 2.4 percent to close at $11.92 yesterday in New York. The stock has surged 51 per cent since Skyworks made its first approach on 5 October. Shares in Microsemi were down 2 per cent at $36.01 while Skyworks stock jumped 3.5 per cent to $77.24.