Microsemi Says PMC-Sierra Prefers Its Bid Over Skyworks Pact
November 10 2015 - 10:00AM
Dow Jones News
Microsemi Corp. said Tuesday that PMC-Sierra Inc. has declared
its latest acquisition proposal is superior to PMC's agreement with
Skyworks Solutions Inc., continuing the dueling negotiations
between the semiconductor companies.
PMC-Sierra earlier this month had said Microsemi's
cash-and-stock takeover offer, valued at $2.38 billion based on
closing prices Monday, wasn't superior to a bid from Skyworks
because the Skyworks all-cash $2.24 billion deal "provides more
value certainty to shareholders" than the Microsemi proposal, which
was "nominally higher."
Representatives from PMC-Sierra and Skyworks were unavailable
for immediate comment Tuesday. On a per-share basis, Microsemi's
offer is now valued $11.97, while Skyworks is at $11.60. PMC-Sierra
closed Monday at $11.75.
PMC makes products for storage, optical and mobile networks.
Skyworks is a semiconductor company, and Microsemi makes chip
equipment and provides software for cloud data.
Under Microsemi's reiterated proposal, PMC shareholders will
receive $9.04 in cash and 0.0771 of a share of Microsemi common
stock for each share of PMC common stock held at the close of the
transaction.
Microsemi said Tuesday that PMC-Sierra board has given written
notice to Skyworks of its intent to approve or recommend the
Microsemi proposal. PMC-Sierra can terminate the Skyworks merger
agreement if Skyworks doesn't make, within three business days
following the receipt of the notice, a superior proposal to
Microsemi's bid.
Skyworks and PMC have said that their revised merger agreement
includes a termination fee of $88.5 million. Skyworks has
maintained that it plans to fund the acquisition with cash on hand
from the combined companies and debt financing.
Microsemi also said Tuesday that it shortened the time to file
an exchange offer with the Securities and Exchange Commission, in
an attempt to try to consummate the deal by the end of 2015.
Microsemi has said that it sees the deal adding immediately to
its adjusted earnings and free cash flow, thanks in part to more
than $100 million in annual cost synergies. The company said the
deal could add about 60 cents to Microsemi's per-share adjusted
earnings.
PMC previously said Microsemi would be one of the most highly
leveraged, publicly traded chip companies after taking into
consideration a potential acquisition of PMC.
The latest offers represent more than a 50% premium to PMC's
stock price when the first deal with Skyworks—valued at $2 billion,
or $10.50 a share—was announced Oct. 5. Two weeks later, Microsemi
unveiled its unsolicited bid worth about $2.22 billion.
Write to Anne Steele at Anne.Steele@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 10, 2015 09:45 ET (14:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
PMC Sierra (NASDAQ:PMCS)
Historical Stock Chart
From Jun 2024 to Jul 2024
PMC Sierra (NASDAQ:PMCS)
Historical Stock Chart
From Jul 2023 to Jul 2024