Dialog Won't Raise Offer for Atmel, Signaling Exit From Bidby and
Atmel’s board had already indicated this week that Microchip’s offer was superior to the terms of the merger agreement it had signed with Dialog last year.
“We have concluded that it is not in the best interests of our shareholders to increase the offer price for Atmel,” Jalal Bagherli, Dialog’s chief executive officer, said in a statement Thursday. “We believed the acquisition was the right strategic decision for us, and we are disappointed that it did not come to fruition.”
Microchip’s binding offer for Atmel is for $8.15 a share, with $7 in cash and a fraction of a share of Microchip common stock valued at $1.15 based on a 10-day average closing price. Earlier this week, Atmel notified Dialog that its board plans to end the merger agreement, which was forged in September. Under the terms of the deal, San Jose, California-based Atmel is required to pay Dialog a $137.3 million termination fee.
The announcement is the latest chapter in bidding for the small chip company, amid a historic round of consolidation in the semiconductor industry that made 2015 a record year for deals. Chipmakers are getting together at an accelerated pace to deal with increasing costs and a narrowing of their customer lists.
The shares of Atmel fell less than 1 percent to $7.93 at Thursday’s close in New York. Microchip’s stock rose 1.8 percent to $42.04.