Microchip, ON Semiconductor still want Atmel, will seek representation on company's board

By Lisa Kerner

Charlotte, N.C., Nov. 12 - Microchip Technology Inc. and ON Semiconductor Corp. remain committed to their proposal to acquire Atmel Corp. for $5 per share in cash, it was announced on Wednesday.

The acquisition, which was rejected by Atmel's board of directors, has already been cleared under the Hart-Scott-Rodino Antitrust Improvements Act, said Microchip.

Microchip and ON Semiconductor said they are prepared to take the $2.3 billion offer directly to Atmel's shareholders.

In addition, Microchip intends to nominate a slate of directors at Atmel's next annual meeting of shareholders, according to a Microchip news release.

ON Semiconductor president and chief executive officer Keith Jackson and Microchip president and CEO Steve Sanghi said they believe Atmel's shareholders "should be given the opportunity to decide whether they prefer our all cash premium transaction or Atmel management's risky and unsuccessful turnaround plan - a plan significantly challenged by the deteriorating macroeconomic environment."

However, Atmel said in a statement that it is "confident that Atmel stockholders will realize greater value through the continued execution of the company's transformation plan, which is just beginning to unlock the value inherent in Atmel."

Atmel reiterated that the Oct. 1 proposal from Microchip and ON Semiconductor "significantly undervalues Atmel, is unacceptably conditional, is subject to significant execution risk, and is not in the best interests of Atmel's stockholders."

According to Atmel, ON Semiconductor has not filed for antitrust clearance for its proposed acquisition of Atmel's nonvolatile memory, radio frequency and automotive businesses.

Atmel also claims that ON Semiconductor, a competitor to Atmel's radio frequency/auto business, is "essentially viewing this as an option to perform due diligence."

On Nov. 10, Atmel entered into an amended rights plan with American Stock Transfer & Trust Co., LLC in response to the Nov. 7 expiration of the Hart-Scott-Rodino waiting period, it was previously announced.

The rights agreement amendment guards against a "creeping accumulation" of Atmel's common stock by Microchip in the currently volatile market, which could impact Atmel's ability to execute its transformation plan, it was reported in a form 8-K filed with the Securities and Exchange Commission.

Microchip is a Chandler, Ariz.-based semiconductor producer.

ON Semiconductor is a Phoenix-based designer, manufacturer and marketer of power and data management semiconductors and standard semiconductor components.

Atmel, based in San Jose, Calif., designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components

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