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EE Times-India > Manufacturing/Packaging

Ixys bids to purchase Zilog

Posted: 20 May 2008     Print Version  Bookmark and Share

Keywords:power semiconductor  bid  acquisition 

Power semiconductor company Ixys Corp. has made an unsolicited proposal to acquire all the outstanding shares of Zilog Corp. for Rs.180.09 ($4.50) in cash and stock.

In March, Ixys acquired 848,256 shares, or approximately 5.0 per cent, of the outstanding common stock of Zilog. Zilog has also been approached by two other firms about an acquisition.

Below is a partial text of the letter that Ixys sent to Zilog's board:

Ixys Corporation would like to enter into exclusive negotiations to acquire Zilog. Our cash and stock proposal represents a fair market value for the company consistent with prior proposals, recognising the value of the company notwithstanding recent quarters of underperformance.

It is readily apparent to us as a shareholder, as well as to your other shareholders, that Zilog has unperformed as an independent company. Zilog's March 2008 fiscal year results did not meet analysts' or the market's expectations. There is growing market sentiment that although Zilog has invested in technologies, the company is not converting these technologies into strong sales. Recent efforts by Zilog to infuse new blood into its sales and marketing team have yet to meet with success. We believe it would be in the company's best interests to enter into merger discussions with a growing, global semiconductor company.

A merger with Ixys will offer the best opportunity for your shareholders, employees and customers, as such transaction would provide Zilog shareholders with immediate liquidity at a premium to the average six-month share price. Additionally, ZiLOG shareholders would have an ongoing equity stake in the combined company, thereby providing them with the opportunity to benefit from the significant upside potential of the combined entity.

- Mark LaPedus
EE Times

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