PMC-Sierra Inc. (Nasdaq: PMCS) itself had not responded to queries from Light Reading at press time. Skyworks Solutions Inc. (Nasdaq: SWKS) has yet to comment, despite its stock taking a hit on the news in late trading.
Microsemi Corp. had been loudly touting the superiority of its offer since announcing it on October 19. But PMC-Sierra on November 1 said it still intended to accept Skyworks' all-cash offer. In its release, PMC-Sierra explained in detail why Microsemi's offer is inferior: while ostensibly for more money, it is a cash-and stock deal, and the stock element is unattractive given that Microsemi is trading at a five-year high and that the company is carrying a heavy debt load. (See Microsemi Challenges Skyworks for PMC-Sierra.)
Microsemi said it has not revised its bid. In its statement, it said, "Microsemi was informed that the PMC-Sierra board has given written notice to Skyworks of its intent to approve or recommend the Microsemi proposal. As a result, PMC-Sierra will be entitled to terminate the merger agreement if Skyworks does not make, within three business days following the receipt of the notice, a binding, written and complete proposal that would cause the proposal received from Microsemi to no longer constitute a 'Superior Proposal.'"
Lacking comment from two of the three companies involved, it is not clear that anything is a foregone conclusion. Parsing the public comments made by the principals thus far, if what Microsemi said is true, then Skyworks need only match the total value Microsemi's offer for PMC-Sierra's board to consider it a superior offer. Skyworks would have until Friday to decide whether to enrich its bid.
— Brian Santo, Senior Editor, Components, T&M, Light Reading