Synaptics to Miss Target Date for Sale, Discuss Lower Price

  • Takeover offer said to drop to about $100-per-share or lower
  • Chinese buyer to revalue Synaptics after Thursday earnings

Synaptics Inc. will miss an end-of-April target date to announce its sale to a Chinese investment group, and may accept a lower offer than previously discussed, according to people familiar with the matter.

While Synaptics is still in talks with the Chinese group, which includes insurance companies and financial institutions, the potential offer for the company has fallen to about $100-per-share or lower, from about $110-per-share, said the people, who asked not to be identified because the discussions are private. The San Jose, California-based chipmaker reports earnings today after the market close.

A deal is at least two weeks away from being agreed and talks may still fall apart, the people said. The Chinese buyer group wants to wait to see how the market values Synaptics after it announces earnings, one of the people said.

Synaptics has a market capitalization of about $3.1 billion.

The buyer group also includes a small investment from a 4 billion yuan ($618 million) integrated-circuit fund backed by BOE Technology Group, a Beijing-based maker of chips used in televisions and computer displays, one of the people said. Beijing E-Town International Investment & Development Co., an investment arm of the Chinese capital, and China’s government-sponsored National Integrated Circuit Industry Investment Fund Co. are investors in the BOE-backed fund, the person said.

“We don’t comment on rumors or market speculation,” Synaptics Chief Executive Officer Rick Bergman wrote in an e-mail. Representatives for BOE Technology Group didn’t respond to requests for comment.

National Mandate

This is at least the second delay for the deal, which Bloomberg first reported in September. Chinese buyers have pursued U.S. semiconductor companies as part of a national mandate to acquire chipmaker technology. Citic Capital Holdings Ltd. and Hua Capital Management Co. closed a $1.9 billion deal to acquire Santa Clara, California-based Omnivision Technologies Inc., whose camera sensors have been used in Apple Inc.’s iPhone, in January.

Still, transactions have been stymied by potential resistance from the Committee on Foreign Investment in the U.S.

Fairchild Semiconductor International Inc. turned down an offer from China Resources Microelectronics Ltd. and Hua Capital Management in February, motivated by concerns about U.S. approval. China’s Tsinghua Unisplendour Corp. opted not to buy a 15 percent stake in Irvine, California-based Western Digital Corp. after the deal came under a U.S. national security review.

Synaptics’s technology is primarily used in consumer devices and personal computers. Its chips control displays and the sensor grids that allow them to recognize touch. It also makes sensors that read finger prints and are used to unlock smartphones and provide user verification for other security applications in handsets. The company’s biggest customer is Samsung Electronics Co., according to Bloomberg’s supply chain analysis.

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