A frustrated U.S. company says it has been forced to make an official – and hostile – takeover bid for Ottawa’s Zarlink Semiconductor Inc.
After rejecting for the second time Microsemi’s offer and refusing to put it to shareholders in part because it wasn’t official, Zarlink’s board set up a committee to review all possibilities for the company and invited Microsemi officials to participate.
But the Irvine, Calif.-company apparently didn’t see this going anywhere and is now making an official offer to shareholders.
“We are disappointed by Zarlink’s board of directors’ insistence on placing onerous restrictions on Microsemi that would have prevented us from presenting our attractive offers to Zarlink’s shareholders and debenture holders,” Microsemi CEO Jim Peterson said in the news release. “Under these circumstances, and in the absence of a more attractive alternative, Microsemi is compelled to take its offer directly to shareholders. Zarlink shareholders will receive a substantial premium, in cash, and without execution or macroeconomic risk.”
Zarlink officials couldn’t be reached for comment this morning. But in a news release issued Wednesday afternoon, its board urged shareholders to do nothing until the directors have met. The release notes that last month it called the Microsemi offer “financially inadaquate and opportunistic.” It also noted that Microsemi decided not to participate in the Canadian company’s strategic review.
The offer represents a 40 per cent premium over the closing price of Zarlink’s common shares on the TSX on July 19, Microsemi said, and a 24 per cent premium over the closing price of the debentures.
“We are committed to building and strengthening Zarlink’s business,” Peterson said in the Microsemi press release, “and believe our offers provide a superior outcome for Zarlink’s shareholders, debenture holders, employees, customers and the local economy …We believe this proposed acquisition provides considerable growth opportunities, and greatly benefits the security holders of both companies.”