Microchip maker Microsemi launches $548.7 million hostile bid for Zarlink

Microsemi Corp, a US-based maker of microchips for the aerospace and defence industries, yesterday launched a hostile $548.7 million cash bid for rival Zarlink Semiconductor, after the Canadian company rejected its two earlier offers.

Microsemi went public with its bid after the board of Ottawa-based Zarlink refused to hold private negotiations with it on both occasions.

Irvine, California-based Microsemi's cash offer is C$3.35 ($3.54) a share, a premium of 40 per cent to Zarlink's closing price of C$2.39 on 20 July.

Microsemi first approached Zarlink in January with an offer of C$3.00 per share, which  Zarlink rejected  and later again rebuffed without discussion the raised C$3.25-C$3.55-a-share bid.

Microsemi said it reduced its bid ''due to the added costs associated with pursing this transaction in a public manner and the inability for Microsemi to perform diligence.''

Zarlink stuck to its earlier stance and refused to budge saying that the latest offer still undervalued the company.