OTTAWA—After chip maker Microsemi Corp. announced a US$548.7 million hostile take-over bid for Zarlink Semiconductor, the Ottawa-based company’s shares soared 50 per cent.
But Zarlink’s board of directors say Microsemi’s offer is a lowball that undervalues the company’s future value.
Microsemi CEO James Peterson called on Zarlink’s shareholders to support the takeover offer.
“We’re disappointed at Zarlink’s continued refusal to review the merits of this proposed combination, not only for the shareholders of Microsemi but certainly for the shareholders of Zarlink, whose interests are not being served by the board and the management team,” he says.
Irvine, Calif.-based Microsemi says it has tried to launch private talks with Zarlink executives several times, including two written proposals—all were rejected without discussion.
Zarlink says its board and financial advisers reviewed previous offers but concluded the offers undervalued the company and its future prospects and that Microsemi’s latest offer doesn’t change anything.
“Zarlink continues to make strong progress as it focuses on growth opportunities in the communication and medical markets,” says Adam Chowaniec, chairman of Zarlink’s board of directors.“Microsemi’s proposal clearly does not capture the value that has been created or that exists in the company.”
Zarlink’s telecom chips are used by equipment makers such as Huwei, Alcatel-Lucent and Cisco for voice and data networks. It also provides low-power radio chips for medical implant devices such as pacemakers and defibrillators that give the devices wireless capabilities to better monitor patients.
Microsemimakes semiconductors for aerospace, defence and security as well as business, industrial and alternative energy markets and has more than 2,800 employees globally.