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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (73177)	7/26/2023 6:44:58 PM
From: Elroy	Respond to of 78998

The SIMO-MXL contract says the the buyer must make effort to close the deal until the outside date (Aug 7th). But I don't think it has a penalty for failing to make that effort - breach of contract? MXL appears to be alleging lots of stuff, so the courts will have to sort it out. One of MXL's claims is that the deal did not extend past the first "outside date" (May 7th) for various reasons. But.....SIMO and MXL together refiled with the US anti-trust agency for approval in June. Another of MXL's claims is that there has been a Material Adverse Effect. SIMO's revenues have collapsed, but the MXL CEO said in a presentation on June 6th "And yes, the revenues of the combined companies have come down and, but it just delays the, what I call the benefits of the acquisition accordingly by a year or so. But the basic rationale has not changed at all. So I believe it's a very strategic asset for the company." Which sounds like the revenue decline is NOT a Material Adverse Effect. MXL harmed lots of SIMO shareholders today, badly. It seems like SIMO should be able to sue them for more than the $160m break up fee. But I don't know what SIMO can compel the courts to give them beyond the fee.