Microchip makes bid for Atmel

Source: Exec Digital USA

Date :10/3/2008 5:23:57 AM

Atmel is currently reviewing the unsolicited offer of US$5 cash per share, or US$2.3 billion.

The Atmel Corp designs and manufactures semiconductor integrated circuits, microcontrollers, wireless and memory chips. Microchip would absorb Atmel into its own business, thought it is thought that Microchip would partially finance the move by selling some of Amtel’s ranges to ON Semiconductor for an undisclosed sum.

Last spring, the company resisted a proposal from its former Chief Executive, George Perlegos, which would have replaced the entire Board of Directors. Atmel’s Chief Executive Steven Lanb met with Microchip’s Chief Executive Steve Sanghi on September 5, to discuss a possible takeover, but the event did not lead to negotiations.

The US$2.3 billion deal values Atmel at 52 percent above its share price, though it is 15 percent lower than Atmel’s share price one year ago. The trend continues for acquisition prices considerably above share prices, indicating that the dip in stock value is not expected to last.

Atmel shares improved 25 percent, to US$4.10.