Atmel amends rights agreement in reaction to potential takeover by Microchip Technology

By Lisa Kerner

Charlotte, N.C., Nov. 10 - Atmel Corp. entered into an amended rights plan with American Stock Transfer & Trust Co., LLC on Monday.

According to Atmel, the move was in response to the Friday expiration of the Hart-Scott-Rodino waiting period in Microchip Technology Inc.'s plan to purchase 50% or more of Atmel's common stock.

The rights agreement amendment guards against "a creeping accumulation of Atmel's common stock by Microchip" in the current 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.

As previously reported, Atmel's board of directors rejected a $2.3 billion offer for the company by Microchip Technology and ON Semiconductor Corp.

The board called the $5-per-share offer to acquire the company "highly conditional" and "inadequate."

Atmel said the amended rights agreement reduces the beneficial ownership threshold to become an acquiring person to 10% from 20% for persons or groups offering to acquire 50% or more of Atmel.

The agreement also amends the definition of beneficial ownership to include derivative interests and appoints American Stock Transfer & Trust as successor rights agent.

Microchip, a Chandler, Ariz.-based semiconductor producer, had planned to finance the acquisition of Atmel in part by the sale of Atmel's nonvolatile memory, radio frequency and automotive businesses to ON Semiconductor, a prior news release said.

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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