Microsemi Again Sweetens Bid for PMC-Sierra

Microsemi Corp. again sweetened its proposal to acquire PMC-Sierra Inc. after PMC's board chose not to recommend the semiconductor company's most recent offer despite being dubbed "superior" to rival Skyworks Solutions Inc.'s bid.

In the $2.3 billion cash-and-stock deal, PMC shareholders would receive $9.22 in cash and 0.0771 of a share of Microsemi common stock for each share of PMC common stock. Based on Microsemi's closing price Tuesday, the deal is valued at $12.05 per PMC share.

Earlier this month, Microsemi said PMC had declared its previous acquisition proposal superior to PMC's agreement with Skyworks, continuing the dueling negotiations between the semiconductor companies. This was shortly after PMC had said the offer wasn't superior to the Skyworks bid because Skyworks all-cash $2.24 billion deal "provides more value certainty to shareholders" than the Microsemi proposal, which was "nominally higher."

"The board of PMC chose not to recommend to their shareholders our previous proposal, which was 17 cents per share higher than the existing offer from Skyworks," said Microsemi Chief Executive James Peterson.

He added the revised offer addresses PMC's preference in increasing the cash component of the proposal.

Microsemi anticipates more than $100 million in annual cost savings with more than $75 million realized in the first full quarter of combined operations. The company estimates about 60 cents of adjusted earnings per share accretion in the first full year after closing the transaction.

Also earlier this month, Microsemi said it shortened the time to file an exchange offer with the Securities and Exchange Commission, in an attempt to try to consummate the deal by the end of 2015.

Write to Anne Steele at [e-mail]

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November 18, 2015 08:55 ET (13:55 GMT)

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