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CSR Rejects Microchip Takeover Bid

28 August 2014

Mixed-signal fabless chip company CSR plc (Cambridge, England) has rejected a take-over offer from microcontroller chip company Microchip Technology Inc. (Chandler, Ariz.).

The move is part of wave of mergers and acquisitions taking place in the semiconductor and electronics sectors and CSR's management is sending out a message that the premiums to be paid are rising.

CSR is publicly traded on the London Stock Exchange and its share price soared after the company announced it had rejected an approach from Microchip. Details of the offer were not provided. CSR's share price climbed close 800p (about $13.26) per share on Thursday (Aug. 27) morning having closed the previous evening at 575p (about $9.53) per share.

"The price proposed by Microchip has been rejected and the board is considering its options for the company," CSR said in a statement. Under London Stock Exchange rules Microchip now has until Sept. 25, to either make a bid or to announce it does not intend to make a bid for a certain period.

Microchip issued a statement Thursday saying it had preliminary discussions with CSR regarding ways in which the companies could advance their relationship, including the possibility that Microchip could acquire CSR.

“The discussions between the parties are at a very preliminary stage and there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made, or that any other type of transaction will be entered into with CSR or as to the terms, structure or form of any such transaction,” the statement read.

Microchip and CSR have worked together on business initiatives in the past, such as a Bluetooth module initiative, Microchip said.

Microchip has been active consolidator in the semiconductor market over the last several years. Acquisitions in 2014 have included Taiwan-based ISSC Technologies Corp., a provider of low-power Bluetooth and wireless chips; and high-voltage analog chip company. Supertex Inc. In November 2013 Microchip announced the acquisition of EqcoLogic NV (Brussels, Begium), a developer of equalizer and transceiver ICs for coaxial cable signal transmission. In 2012 Microchip acquired Roving Networks a vendor of Bluetooth wireless modules and other connectivity solutions. In the same year Microchip acquired Standard Microsystems Corp. for about $750 million bringing expertise in low-power USB, Ethernet, wireless audio and automotive applications.

CSR, formerly known as Cambridge Silicon Radio, was one of two successful UK fabless chip companies that was able to go public in recent years. Cambridge Silicon Radio built its position on the provision of CMOS wireless transceivers for the Bluetooth standard. However, in July 2012 CSR sold its mobile phone connectivity business and location businesses to Samsung Electronics for $310 million reducing the size of the company. As part of the deal Samsung acquired a minor stake in CSR.

It was announced in April 2014 that the other company, Wolfson Microelectronics plc (Edinburgh, Scotland), which specializes in signal processing and mixed-signal functions, would be acquired by Cirrus Logic Inc. for £278 million (about $467 million).

Related links and articles:

www.csr.com

www.microchip.com

IHS connectivity and IoT services

News articles:

Future Signs Distribution Deal with CSR

Consolidator Microchip Makes Supertex Power Play

Apple Supplier Cirrus to Buy Samsung Supplier Wolfson



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