The board of US chip maker Ramtron International Corporation (NASDAQ:RMTR) today reiterated its recommendation to shareholders to reject the $2.68 (€2.00) per share takeover offer of rival Cypress Semiconductor Corporation (NASDAQ:CY) and said the bid was “inadequate”.
The company’s board has reviewed the sweetened cash offer jointly with its advisors and concluded that it fails to “reflect the intrinsic value of the company and is not in the best interest of Ramtron and its stockholders”. Ramtron’s chairman said that Cypress’ bid “undervalues its valuable intellectual property and F-RAM technological expertise as well as the company’s strong long-term growth prospects”.
Among Ramtron’s reasons for the rejection is also the company’s higher share price following the start of the tender offer on 21 June. The company said it would seek other alternatives, including a sale or a joint venture, to support its future growth.
Cypress Semiconductor offered on 12 June to buy the company for nearly $88m in cash. This was its second attempt to acquire Ramtron. Although its new offer was lower than the one Cypress made last year, it carried the same premium of 37%. Later on, the suitor raised its bid to $2.68 per share, thus offering a 48% premium to Ramtron’s closing price on 11 June.
In a letter sent to Ramtron on 21 June, Cypress president and CEO T J Rodgers said his company’s offer was not conditional on any financing or due diligence process and would secure substantial premium and immediate liquidity to shareholders. He added that Ramtron’s board rejection was very disappointing, but his company would continue to pursue its acquisition.
Needham & Company LLC is advising Ramtron on the financial side of the deal and Shearman & Sterling LLP is serving as its legal advisor. Cypress has picked Greenhill & Co LLC and Wilson Sonsini Goodrich & Rosati Professional Corp as its financial advisor and legal counsel, respectively.
Colorado-based Ramtron International is a fabless semiconductor company that designs, develops and markets specialised semiconductor memory and integrated semiconductor solutions.