If the equity stake results in cash, C-Cube will make a purchase with the cash. They need to add to both thier systems division and to semi cores. They can't use the stock for a purchase, it's value is too low. They might want something that Intel wants, but C-Cube is a better fit. Libit................................
cabledatacomnews.com
APRIL 1999 HIGHLIGHTS
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Libit Rejects Intel Acquisition Attempt
Lucent Microelectronics Still Pursuing
Broadband Silicon Start-Up
So far, the chipsets of only two companies have been built into DOCSIS cable modems certified by Cable Television Laboratories: Broadcom Corp. and Libit Signal Processing.
High-flying Broadcom currently dominates the cable modem chip market and enjoys a massive $5 billion market capitalization. However, after Toshiba obtained CableLabs certification for its DOCSIS modem using Libit's chipset, little-known Libit of Herzlia, Israel quickly emerged as Broadcom's top competitor.
Libit's efforts have not gone unnoticed by leading communications chip companies, such as Lucent Microelectronics, but Intel Corp. made the most aggressive attempt to acquire the start-up. Ultimately, though, Intel's advances went unrequited.
Intel entered and exited the cable modem business twice, but has continued to evangelized the benefits of broadband Internet access since it drives demand for increased PC processing power.
Intel liked what it saw at Libit and apparently began floating plans for an acquisition in early 1999. Talks quickly heated up, with Intel offering to pay between $250-$290 million for Libit. Negotiations cooled in early March, though, when Intel learned Lucent and others were also pursuing the privately-held company. Intel then announced its own plans to acquire networking chip player Level One Communications Inc. for $2.2 billion. Libit ultimately put the Intel deal on hold to explore other options.
Eager to gain a foothold in the cable modem chip market, Lucent and several other companies prepared formal bids to buy Libit in March, all for at least $250 million.
Libit executives refused to comment on the situation except to say the company is evaluating multiple opportunities and will select the one that offers the best strategic fit.
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