Memory and Storage

Bidding War Erupts Over ISSI

01 June 2015

Cypress Semiconductor Inc. has made another offer to acquire Integrated Silicon Solution Inc. (ISSI), topping a bid that was made in late-May by a consortium of Chinese venture capital firms led by Summitview Capital.

Cypress’ new offer would consist of $20.25 per share in cash, or about $680 million, for all of the outstanding common stock of ISSI. The consortium, known collectively as Uphill Investment Co., raised its offer to $20 per share, or roughly $666 million in total, on May 29.

ISSI delayed a special meeting of its stockholders—which was to be held June 3—until June 12.

ISSI (Milpitas, Calif.) says it will entertain the proposal made by Cypress, saying failure to do so would not be reasonable to stockholders. As a result, ISSI says it will engage in further discussions with Cypress in regard to the offer.

But ISSI says it has concerns about the offer from Cypress and the ability to finance the approximately $680 million purchase price as Cypress has only $157 million in cash and about $494 million in debt on its balance sheet. ISSI says it has asked Cypress to provide a financing commitment letter to support the deal but they have yet to do so.

On May 14, Cypress formally bid to acquire the specialized memory vendor for about $658 million, topping the original bid made by Uphill by about $18 million. ISSI later met with Cypress and provided the company with confidential information Cypress had requested.

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