[history of TXN/AMTX merger from TXN's perspective]
excerpted from the 14D-1.
looks like $20/share was TXN's third bid for AMTX. they made a bid for an undisclosed sum in late September, which was rejected by AMTX in favor of the WSTL offer. they came back in early November with an $18/share bid, and in negotiations with AMTX the figure moved up to $20/share. i shudder to think what their first bid was...
TXN didn't pay the WSTL breakup fee. they loaned AMTX the money to pay it. so if someone outbids TXN, TXN gets its $14.8M back from the eventual buyer.
mark
P.S. to access the 14D-1, go to freeedgar.com, type AMTX in the "ticker symbols" field, click on "[SEARCH]", click on "Company Filings", and then click on "AMATI COMMUNICATIONS CORP" for the record showing Form Type of "SC 14D1".
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11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
In October 1996, Parent and the Company entered into a Cooperative Development and Product Sale Agreement pursuant to which the Company agreed to develop and sell to Parent certain software to be incorporated into Parent's digital signal processing products. Pursuant to such agreement, the Company granted to Parent certain licenses to use, copy, sell and manufacture certain of the Company's intellectual property included in the software to be developed by the Company. Such agreement was not related to the subsequent contacts between Parent and the Company in connection with the Offer and the Merger.
Set forth below is a description of the background of the Offer, including a brief description of the material contacts between Parent and its affiliates and the Company and its affiliates regarding the transactions described herein.
On July 17, 1997, representatives of DMG contacted Parent's head of Corporate Development and informed him that the Company had been approached by several parties interested in a possible business combination with the Company and that the Company had engaged DMG to assist the Company in evaluating its strategic alternatives. Parent expressed an interest in evaluating a possible transaction with the Company and was provided with certain publicly available information and a form of confidentiality agreement.
Parent's management held several internal meetings during late July to discuss a possible transaction with the Company. After deciding to proceed, Parent executed a confidentiality agreement with the Company on August 4, 1997 (which agreement was dated to be effective as of July 22, 1997).
On August 7, management of the Company gave a presentation for certain management representatives of Parent. On August 13, Parent contacted Morgan Stanley to engage it as Parent's financial advisor for the purpose of evaluating a potential transaction with the Company.
From mid-August through mid-September, Parent conducted its due diligence investigation of the Company and had extensive internal working sessions to evaluate a possible transaction with the Company. Morgan Stanley and DMG had numerous discussions during the same period regarding the Company's timetable and process for exploring a possible transaction and alternatives.
On September 18, 1997, Parent's board was briefed with respect to management's ongoing evaluation of a possible transaction with the Company. On September 24, 1997, Parent's management decided to submit a formal bid for a proposed acquisition of the Company by Parent.
Parent continued its due diligence investigation through late September. During this period DMG informed Morgan Stanley that in light of the status of the Company's current discussions with other parties, prompt action by Parent regarding a proposal was necessary. On September 29, 1997, Parent submitted a formal bid letter proposing an acquisition of the Company by Parent. On the next day, however, the Company Board determined to accept a competing bid submitted by Westell Technologies, Inc. ("Westell"). Parent was notified by DMG of the Company's decision that same day. On October 1, 1997, the Company and Westell publicly announced that they had entered into a definitive merger agreement providing for the acquisition of the Company by Westell.
Throughout the month of October, Parent and its advisors held several meetings to evaluate Parent's options with respect to the Company, including the desirability of submitting a competing proposal for the acquisition of the Company by Parent. On October 29, 1997, Parent's options were presented to and discussed by Parent's senior management. At the conclusion of this meeting, it was determined that Parent should proceed with the submission of a competing proposal for the acquisition of the Company by Parent.
On November 4, 1997, Parent sent an offer letter and a draft merger agreement to the Company for its review. The offer letter, which was subject to the approval of Parent's board of directors later that week, proposed a cash tender offer for all shares of the Company at $18.00 per Share.
On November 7, DMG informed Morgan Stanley that the Company Board had evaluated Parent's proposal and determined that it was permitted under law and the terms of its merger agreement with Westell to enter into discussions with Parent. Parent was informed that its final bid must be submitted by November 12, 1997.
On November 11, 1997, Parent's board of directors was briefed on the recent developments. At the conclusion of the briefing, Parent's board approved the proposed transaction and authorized senior management to negotiate and approve the final terms of the transaction.
On November 12, Parent submitted a proposal to acquire the Company for cash consideration of $20.00 per Share. During the period from November 7 through November 12, the Company's and Parent's respective legal counsel negotiated the terms of the proposed merger agreement and related documentation.
Parent was notified on November 13 that the Company Board had determined to accept Parent's proposal and to terminate the Company's merger agreement with Westell. Later that same day, the Company notified Westell of the Company Board's decision accordance with the terms of its merger agreement with Westell.
On November 18, the Company Board met again to consider and review the terms of the proposed merger agreement with Parent. At that meeting, DMG made a presentation to the Company Board and delivered its oral opinion (which opinion was subsequently confirmed in writing), that the $20.00 per Share cash consideration to be received by the Company's stockholders pursuant to the Offer and the Merger was fair to such stockholders (other than Parent and its affiliates) from a financial point of view. After its discussion (during which the Company Board took note of the fact that Westell was not contemplating any proposal to improve the terms of the Company's merger agreement with Westell), the Company Board unanimously approved the Merger Agreement and the transactions contemplated thereby, and unanimously resolved to recommend that the Company's stockholders accept the Offer and tender their Shares pursuant thereto.
Effective as of November 19, 1997, Parent, the Purchaser and the Company executed and delivered the Merger Agreement, the Loan Agreement (as defined in Section 12) and certain related documents. The signing of the Merger Agreement was publicly announced on the morning of November 19 prior to the open of trading. Proceeds of the loans under the Loan Agreement were used to pay Westell the termination fee required pursuant to the terms of Westell's merger agreement with the Company as well as the outstanding balance of Westell's loans to the Company. |
