Comms chips

Microsemi + PMC-Sierra: Drama, Yes, But a Deal?

Microsemi on Tuesday announced that PMC-Sierra's board said Microsemi's offer to buy the company is superior to the offer previously tendered by Skyworks.

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.)

For more on components, visit the dedicated section here on Light Reading.

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

Be the first to post a comment regarding this story.
Sign In