Atmel says 'no thanks' to offer from Microchip Technology, ON Semiconductor

By Lisa Kerner

Charlotte, N.C., Oct. 29 - Atmel Corp.'s board of directors said the Oct. 1 unsolicited proposal from Microchip Technology Inc. and ON Semiconductor Corp. to acquire the company for $5 per share is inadequate and not in the best interests of Atmel's stockholders.

It was previously reported that the offer was valued $2.3 billion and was subject to the sale of assets, due diligence and financing.

"[The] highly conditional proposal significantly undervalues Atmel and would deprive Atmel stockholders of the greater value that can be achieved through the continued execution of the company's transformation plan," David Sugishita, chairman of Atmel's board, said in a company news release.

According to Atmel president and chief executive officer Steven Laub, the company's third-quarter results demonstrate Atmel's progress.

"We will continue to take all appropriate steps, including selling or shutting down those businesses that do not meet our financial or strategic objectives, to ensure that we build on this momentum and realize Atmel's full potential," Laub said in the release.

Microchip, a Chandler, Ariz.-based semiconductor producer, planned to finance the acquisition 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 would have financed its purchase using a combination of existing cash resources, borrowings under its existing credit facility and additional financing.

Microchip said it planned to dispose of Atmel's application-specific integrated circuit business once the acquisition of Atmel was complete.

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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