Shares of Zarlink Semiconductor Inc. ZL-T traded higher Wednesday as investors speculated that a rival bid to a $548.7-million (U.S.) hostile takeover offer from U.S. chipmaker Microsemi Corp. could be possible.
The pop in the stock came as California-based Microsemi mailed details of its offer to Zarlink shareholders.
Zarlink shares were up 22 cents, or 6.7 per cent, at $3.53 in early trading, topping the offer of $3.35 per share by California-based Microsemi.
Shares in the Ottawa-based Zarlink traded for $2.39 before the offer was first announced on July 20.
Zarlink has dismissed the bid as undervaluing the company and has said it is proceeding with a review of strategic alternatives, but so far no competing bid has emerged.
Microsemi president and CEO James Peterson said the company, which mailed its offer to Zarlink shareholders Wednesday, was by “disappointed” by the rejection of its offer by Zarlink's board of directors.
“Under these circumstances, and in the absence of a more attractive alternative, Microsemi is compelled to take its offer directly to shareholders,” Peterson said.
Zarlink shareholders are being offered $3.35 for each common share and $1,367.35 per $1,000 principal amount, plus accrued and unpaid interest, for the company's subordinated convertible debentures maturing on Sept. 30, 2012.
The Microsemi offer is open until 5 p.m. (ET) Sept. 22, subject to certain conditions, including acceptance by at least two-thirds of Zarlink shareholders on a fully diluted basis and that the Zarlink board either waive its shareholder rights plan or that the plan otherwise becomes invalidated.
Zarlink has instituted a so-called poison pill plan to prevent any one party from acquiring more than a 20 per cent voting interest without the company's permission.
Microsemi, with 2,700 employees, markets semiconductor solutions for aerospace, defence and security, enterprise and communications and industrial and alternative energy markets.
Zarlink makes chips for a broad range of communications and medical applications.
Source: The Globe and Mail
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