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CSR Considering Steps After Rejecting Microchip Technology Offer

Aug. 29 (Bloomberg) -- CSR Plc, a U.K. chipmaker that pioneered Bluetooth wireless technology, is “considering its options” after rejecting a bid from Microchip Technology Inc.

Microchip said that there had only been preliminary discussions and it might not make an offer. The U.S. chipmaker must say whether it wants to pursue a transaction by Sept. 25 under U.K. takeover rules.

CSR, whose products are used in smartphones, cars and personal navigation devices, is benefiting as more gadgets connect to each other using Bluetooth and other technologies, Chief Executive Officer Joep van Beurden said last year. Dealmaking in the semiconductor industry has picked up this year, with Infineon Technologies AG last week agreeing to buy International Rectifier Corp. for about $3 billion.

Cambridge, England-based CSR disclosed the negotiations in a statement yesterday. CSR, whose stock had lost 9 percent this year before yesterday’s disclosure, could be sold for as much as $3 billion, the FT reported. The U.K. chipmaker has hired banks to advise on a potential transaction, according to the report.

CSR shares rose as much 225 pence to 800 pence yesterday, the biggest intraday gain since July 2012. The stock closed at 780 pence in London, giving CSR a market value of about 1.3 billion pounds ($2.2 billion). Chandler, Arizona-based Microchip rose less than 1 percent to $48.02 at the close in New York.

Paul Sharma, a spokesman for CSR, declined to comment beyond yesterday’s statement.

Microchip’s Acquisitions

Microchip has had preliminary discussions with CSR that include the possibility of an acquisition of CSR, Microchip said in a statement yesterday.

“The discussions between the parties are at a very preliminary stage and there can be no certainty that an offer will be made,” Microchip said.

Eric Lawson, a spokesman for Microchip, said the company isn’t commenting beyond the contents of the release.

CSR was looking for small acquisitions to boost its prowess in mapping, voice recognition and other areas, Van Beurden said last year. The company was also working on location technology to use indoors in spaces such as shopping malls, airports and hospitals, he said at the time. The company sold its wireless unit to Samsung Electronics Co. in 2012 for $310 million in cash. Samsung also purchased a 5 percent stake in CSR at the time of the deal.

Microchip, whose customers include Hewlett-Packard Co., Siemens AG and Apple Inc., has announced acquisitions including ISSC Technologies Corp. and Supertex Inc. this year.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net

To contact the editors responsible for this story: James Boxell at jboxell@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net; Robert Valpuesta at rvalpuesta@bloomberg.net; Amy Thomson at athomson6@bloomberg.net Reed Stevenson, Ben Livesey

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