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VLSI Director Says Philips Bid to Be Taken Seriously (Update1) (Adds details starting in 6th paragraph.)
San Jose, California, March 1 (Bloomberg) -- VLSI Technology Inc. board members are taking seriously a $777 million offer for the semiconductor maker from Royal Philips Electronics NV and will meet Wednesday to consider it, director Paul Low said.
Philips was on a list of companies that VLSI considered ''useful to partner with'' even before the Dutch company made its bid Friday, Low said. He declined to say what other companies are on the list of desired partners.
Philips, the No. 1 chipmaker in Europe, is offering $17 a share in cash for VLSI, 58 percent more than its Thursday close. It wants VLSI's digital-signal processors to jump-start its cell- phone business and other high-performance chips for portable computers and digital-electronic products. ''This offer is going to be very, very seriously considered,'' said Low, a VLSI director for the three years and former head of microelectronics at International Business Machines Corp. '' There are good arguments for pursuing this kind of transaction.''
The meeting, to include lawyers and investment bankers, will start at 9 a.m. California time at VLSI headquarters in San Jose. Low expects it to run about five to six hours.
Philips set a Wednesday deadline for a response from VLSI. 'Terribly Disappointed'
Low, 65, said he's ''terribly disappointed'' with VLSI's performance over the past year. The company had a profit of $1 million, or 2 cents a share, in the fourth quarter, a 95 percent drop from $22 million, or 45 cents, a year earlier.
The Philips offer is lower than one from LSI Logic Corp. early last year, though Low said it might have a better chance of succeeding. VLSI may, however, seek a higher bid from Philips or another company. ''It's clear that the directors have a responsibility to shareholders, if the company's going to be in play, to get the best possible price,'' Low said. He said he didn't know if any other companies have made formal bids.
VLSI rose 5/8 to 16 1/8. Philips U.S. American depositary receipts fell 3/4 to 68 7/8. |
