Ixys Corporation (IXYS.OB), a developer, manufacturer and marketer of a broad spectrum of power semiconductors and power modules for the global power market, recently announced an unsolicited proposal to acquire Zilog, Inc., an embedded chip manufacturer that makes chips for integration into networking and wireless devices.
Trading on Ixys Corporation’s stock increased more than 5.4 percent following the news of the proposed acquisition. Under the terms of the agreement, Ixys Corporation has proposed to purchase Zilog for $4.50 per share to be paid in an unspecified mix of Ixys stock and cash. Zilog, Inc. is currently evaluating the proposal. Additionally, Zilog shareholders would have an ongoing equity stake in the combined company, creating significant upside potential of the combined entity.
Over the past several years, Zilog, Inc. has successfully restructured the company and paid down its bank debt to have a significant net cash position of $18.1 million in cash and cash equivalents. In addition, Zilog’s flash products have increased at double digit growth rates. Ixys Corporation believes that this merger, if completed, will offer shareholders immediate liquidity at a premium to the average six-month share price.
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