Spansion completes Saifun purchase: The final price is 17% less than the value on the day the deal was announced.
Friday , March 21, 2008 15:41ET
Dan Shohet
Mar 19, 2008 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Spansion Inc. (Nasdaq: SPSN) has completed its acquisition of flash memory maker Saifun Semiconductors Ltd. in accordance with the definitive merger agreement and its amendment that the companies signed on October 8, 2007 and December 12, 2007, respectively. The closing ends Saifun's independence and it has become a wholly-owned subsidiary of Spansion. The company will be delisted from trading on Nasdaq.
Saifun's value for the sale was $249 million, or $7.70 per share, in cash and Spansion shares. The final price is 17 percent less than the value on the day the deal was announced, and 67 percent less than Saifun's market cap when it went public in 2005.
Saifun founder and CEO Dr. Boaz Eitan faced a hard time to obtain approval of the sale from the company's shareholders. Many minority shareholders opposed the sale, and that there had been a plunge in value of Spansion's shares since the deal was announced. The amended sale contract increased the cash part of the sale by $1 per share, and Saifun's shareholders consented to the sale.
Saifun has $235 million in cash and cash equivalents, enabling Spansion to finance the $196 million cash part of the deal from Saifun's own reserves.
Saifun noted that, since 2002, Spansion has been a licensee of Saifun's NROM intellectual property, which has formed the cornerstone of Spansion's proprietary MirrorBit technology. MirrorBit technology now represents nearly one fourth of the entire NOR Flash memory segment, and generates revenues at a run rate approaching $2 billion per year. Spansion has more than 3,000 patents and patent applications in the area of non-volatile memory, combining Spansion IP and NROM IP.
IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Clal Industries and Investments Ltd. (TASE: CII) noted that will receive $17.1 million in cash and 2.1 million Spansion shares for its 9 percent stake in Saifun. Clal Industries added that it made a NIS 81 million write-down on the value of its Saifun stake in 2007 and will make a further provision of NIS 24 million in the first quarter of 2008.
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