GigOptix Inc. has made a second attempt to acquire GSI Technology Inc. for a price of $6.50 per share, or about $154 million.
GigOptix is a maker of semiconductors for data centers, cloud computing and consumer electronics. GSI makes SRAM for networking and telecommunications.
In a letter sent to GSI Technology’s board of directors, Avi Katz, chairman, president and CEO of GigOptix, outlines a handful of reasons why GSI should engage in talks with GigOptix. Among the reasons is that the purchase price would represent a 32% premium over the current share price of GSI and a 10% premium to the highest price at which its shares have traded since its original offer in August of 2014.
Katz discusses the recent settlement with Cypress Semiconductor Inc. in which GSI was awarded money, but only after incurring legal fees of more than $30 million.
Katz claim’s that GSI has set unreasonably high expectations for its investors that the company has not been able to live up to. He notes that GSI’s first quarter revenue was down 8.7% from the first quarter of 2014.
“GigOptix believes the stockholders of GSI Technology would be well-served by its board of directors giving due consideration to the offer,” Katz says.
Last year, GigOptix made a play for GSI at the same price of $6.50 per share. A month later GSI Technology rejected the offer, calling it contrary to being in the best interest of its stockholders.
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