PMC-Sierra Commits to Skyworks After Microsemi's Higher Offer

PMC-Sierra Inc. said it’s committed to a takeover offer from Skyworks Solutions Inc. even after Microsemi Corp. raised its competing bid for the maker of semiconductors for network drives.
While Microsemi’s $11.88 a share proposal is “nominally higher,” Skyworks’ bid provides more value certainty because it’s all cash, PMC-Sierra said in a statement. Microsemi is offering $9.04 in cash and 0.0771 of common stock per share while Skyworks proposal is at $11.60 a share.
Surging costs for design and manufacturing, along with a shrinking customer base, has driven a surge in deals by semiconductor makers. More than $90 billion in chip industry deals are pending or have been completed this year worldwide, according to data compiled by Bloomberg.
“At this time PMC’s board is unable to conclude that Microsemi’s proposal constitutes a superior proposal as required under PMC’s existing Skyworks merger agreement,” it said in the statement.
PMC-Sierra makes chips that control drives in network equipment, data-center storage systems and mobile-phone networks. The company, which reported sales declines in two of the past three years, had hired a financial adviser to seek a sale of the company, people familiar with the matter had said.
Skyworks, based in Woburn, Massachusetts, makes chips used in aircraft, automotive and security systems, among others. The company intends to fund the acquisition with cash on hand from the combined companies and fully committed debt financing. Microsemi also makes chips for the military, specializing in parts that can withstand the rigors of environments that include things like radiation that would fry normal semiconductor products.

http://www.bloomberg.com/news/articles/2015-11-02/pmc-sierra-commits-to-skyworks-after-microsemi-s-higher-offer