Broadcom Corporation Completes Acquisition of Maverick Networks, Alliance Semiconductor Reports Gain on Transfer of $52 Million
SAN JOSE, Calif.--(BUSINESS WIRE)--June 3, 1999--In a press release dated June 1, 1999 Broadcom Corporation (Nasdaq:BRCM), a leading developer of integrated circuits enabling high-speed broadband communications, announced that it completed the acquisition by merger of Maverick Networks on May 31, 1999.
The proposed merger transaction was originally announced by Broadcom Corporation on January 25, 1999 and Alliance Semiconductor on January 27, 1999.
As a result of this merger, Alliance Semiconductor (Nasdaq:ALSC) will report a pretax, non-operating gain of approximately $52 million on its investment in Maverick Networks in the financial results for the first quarter ending July 3, 1999, based on Broadcom's closing stock price of $95 3/4 on May 31, 1999.
In connection with the closing of Maverick Networks, Alliance Semiconductor will receive 538,961 shares of Broadcom's Class B Common Stock. According to Broadcom, shares of Broadcom's Class B Common stock are identical to Class A Common Stock except for certain voting rights, and are automatically converted into Class A Common Stock upon sale.
As reported in Alliances' Fourth Quarter FY 1999 earnings release dated April 27, 1999, the Broadcom shares are subject to certain restrictions, including a restriction pursuant to the pooling-of-interest rules which prevents the company from selling its shares until Broadcom first publicly reports thirty days of Broadcom and Maverick Networks combined operating results.
According to the company's agreement with Broadcom, 10% or 53,896 shares of Broadcom stock will be held in escrow for six months to potentially compensate Broadcom for losses, if any, Broadcom may incur if Maverick breaches terms of the merger agreement, or misrepresents information in the transaction.
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