Zoran shareholders will receive $6.26 in cash and 0.589 ordinary share of CSR in American Depositary Shares for each Zoran common shares, Cambridge, England-based CSR said in a statement on the Regulatory News Service today. The transaction values Zoran at $9.19 per share or about $484 million, down from $679 million when an all-stock deal was announced on Feb. 21.
CSR lowered its bid after Zoran reported a larger-than- expected loss last month and Cisco Systems Inc’s said it would exit its Flip digital video camera product line. The Flip accounted for about $10 million of Sunnyvale, California-based Zoran’s digital-camera revenue each quarter, according to an estimate by Lazard Capital Markets LLC.
Zoran, which makes chips for digital audio and video products, in May reported a first-quarter loss of 43 cents a share, missing the average analyst estimate, according to Bloomberg data. CSR said at the time it would consider the implications of Zoran’s earnings statement.
Net of Zoran’s cash balance of $251 million as of March 31, 2011, today’s transaction value implies an enterprise value of $233 million, the statement said. That is down from $418 million. CSR rose 0.6 percent to 309.9 pence, valuing the company at 529 million pounds ($851 million).
Zoran shareholders will own approximately 16.5 percent of the combined group on a fully diluted basis as of 16 June 2011 when the deal is done, according to the statement. CSR won’t proceed with its on-market share buyback program announced on Feb. 21, the company said.
“The CSR transaction is in the best interests of Zoran and its stockholders, the Zoran Board considered other potential cash and stock merger partners, as well as Zoran’s standalone options,” said Levy Gerzberg, Zoran co-founder and CEO.
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