"As a user of EZ's chips, eventually the NPS-MX, Mellanox will harvest 10 times the revenues EZchip can get as a producer of chips alone."
Eyal Said this before the deal was blocked if I am not mistaken. He never would have revealed the value EZCH has for MLNX if he thought the deal would be blocked. It will be difficult to walk that back in the present if the shareholders are able to prevail with a no vote until a more reasonable price is reached.
Gilder's comment in November:
"I think the price is ridiculously cheap.
I think personal dynamics between Eli and Eyal play a key role. Eli was meeting with Eyal Waldman, a charismatic IDF war hero and CEO, at a time when EZ's stock was way down, and Eli was contemplating retirement. Eyal seemed to offer a way out.
I think Eli will have difficulty reneging on his commitments to Waldman, who is imperious and persuasive.
At the same time, I think there are real dangers of losing key engineers. Eli fears this.
EZ will have to be saved by a stockholder rebellion. I hope it succeeds.
But no one should imagine that it will be easy or risk-free."
Out of the mouth of 3 witnesses Eyal, Eli, GG and the Barclay's appraisal method you end up with 4 witnesses that are in agreement that 25.50 is too low.
If Eli did not want to stand up for the shareholders, he could have least structured the deal to bring the capitol on board in the combined entity. At this stage, if MLNX offers a better price, they will still reap the benefit of more capital following on in investment in the new venture, so a better price will not be as much of a negative.
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