I don't know the reason for the discount.
Perhaps the market thinks China doesn't want a fairly large and sophisticated Taiwanese IT design company to fall into US control, so China will veto the deal? Perhaps. Flash controllers are ubiquitous, but hardly essential like ARM. Some other company could produce the same controller fairly easily I think, SIMO just has the benefit of first mover and large volumes, so SIMO makes lots of money in flash controllers while a new entrant fighting for share would lose money perhaps forever (unless SIMO died).
I think the shareholders will approve the deal.
I don't know why management sold, but the timing is pretty great. Without the deal, SIMO would likely be $60 and going who knows where. As it is we likely get ~$110 value whenever the deal closes.
We may get some action between Q2 reporting for MXL and SIMO (June 27) and the shareholder vote Aug 31st. Maybe someone else will hostile bid? If so, it would probably happen in Aug before the vote, If not, I would expect the vote to approve, and then we wait for Chinese approval, which could come any day, and be a Yes or a No, I got no real idea which. |
