VLSI---NEWS!
PPhillips Bids For VSLI Technology
AMSTERDAM (Reuters) - Dutch Electronics group Philips said Friday it had offered to buy all the
outstanding stock of semiconductor firm VLSI Technology Inc. (Nasdaq:VLSI - news) in a cash
deal that could be worth about $776.9 million.
Philips said it had offered to pay $17 per share for some 45.7 million VLSI shares outstanding -- a
premium of around 60 percent on the stock's Thursday closing price.
''We feel that the $17 is a fair price for the (VSLI) shareholders,'' Philips spokesman Jeremy Cohen
said, adding ''If you look at the reasons why we want to buy it, then it is a fair price.''
Philips said in a statement early Friday its bid was consistent with its strategy of looking for
acquisitions to bolster its U.S. presence, adding it planned to make VSLI the ''cornerstone'' of its
growth strategy for Philips Semiconductors.
VSLI, based in San Jose, California, posted turnover from continuing operations of around $550
million in 1998 while Philips Semiconductors had full-year sales of 7.1 billion guilders ($3.56 billion).
Cohen confirmed the acquisition, if accepted, would be financed from existing resources. He
declined to comment on VLSI's likely response to the proposal or the atmosphere of preliminary
talks.
''We cannot really comment any further... the ball is in VLSI's court,'' he said.
Analysts were upbeat on the potential acquisition, labeling it an excellent fit for Philips if it went
ahead.
''I think it's a perfect takeover and it's not even that expensive,'' said Rene Verhoef of Generale
Bank's Oyens & Van Eeghen.
''I've had a look at the (VSLI) balance sheet and the goodwill isn't actually that steep. Furthermore
they've got a good portfolio of products and excellent growth potential.''
The news, which came out of the U.S. overnight, met a lukewarm response on the Amsterdam
Stock Exchange, however.
Philips shares traded flat over the session, standing down 0.39 percent at 63.50 euros by 1430
GMT.
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