The board of directors of Zarlink Semiconductor Inc. (TSX:ZL) has responded to Microsemi Corp.’s (NASDAQ:MSCC) third unsolicited takeover offer with the same sentiment as the previous two: Nuts!
The board acknowledged receipt of the non-binding proposal from Microsemi for all of Zarlink’s outstanding shares for CAD$3.35 per share in cash (see “Microsemi makes run at Zarlink Semiconductor”), as well as the previous two. The earlier bids, one each on May 20, 2011 and June 17, 2011, offered CAD$3.00 and CAD$3.25 per share, respectively. Having “carefully and thoroughly reviewed these non-binding expressions of interest” with financial advisors RBC Capital Markets and Canaccord Genuity and external legal counsel, the board rejected them as undervaluing the company.
“The latest non-binding proposal from Microsemi received July 20, 2011 at $3.35 per share does not change the conclusion of the board,” a statement from the board reads in part.
"The Zarlink Board has always been prepared to consider and pursue strategic transactions or plans and will consider all appropriate alternatives which capture the true value of the company for its stakeholders" wrote Adam Chowaniec, chairman of Zarlink's board of directors, in the statement. "Zarlink continues to make strong progress as it focuses on growth opportunities in the communication and medical markets. Our line circuit and network timing products are winning new designs with customers and gaining market share. We have been aggressively investing to build a unique strategic position in the medical wireless market, and with our radio products now being designed in with the leading device manufacturers we are at a point of growth inflection with this segment of our business. Microsemi's proposal clearly does not capture the value that has been created or that exists in the company."
As part of the focus Chowaniec mentions in his statement, Zarlink sold its Optical Product Group to TE Connectivity (then Tyco Electronics) in May 2010 (see “Zarlink sells Optical Products group to Tyco Electronics”).The group developed and marketed multi-channel laser drivers and both transimpedance and limiting amplifiers; fiber-optic modules and transceivers, including 12-channel devices and QSFPs; and active optical cables.
The company's annual shareholders meeting is scheduled for July 27.