Update August 21, 2012 — Cypress Semiconductor Corporation (NASDAQ:CY) has extended its tender offer to acquire all of the outstanding stock of Ramtron International Corporation (NASDAQ:RMTR) for $2.68 per share in cash to 5:00 pm EST on August 24, 2012.
Update August 7, 2012 — Cypress extended its tender offer to acquire all of the outstanding stock of Ramtron for $2.68 per share in cash to 5:00 pm EST, on August 17. This is the second extension Cypress has made, though Ramtron initially rejected the offer.
Cypress’s offer represents a 48% premium over Ramtron’s closing price of $1.81 per share on June 11, 2012, the day before Cypress publicly disclosed its offer for Ramtron. All other terms and conditions of the offer remain unchanged. The all-cash offer is not conditioned on due diligence or financing.
Cypress sent a letter to Ramtron’s board of directors when it extended the deadline, stating that Ramtron stockholders have not been given “a fair opportunity to consider [Cypress’s] offer or a transaction that delivers immediate and certain value in excess of what we have offered.” The letter also calls out “Ramtron’s ongoing weak performance” and “failure to meet expectations for the second quarter,” as well as weak guidance for the third quarter, which Cypress sees as evidence that Ramtron’s revamp efforts are “not proceeding at the rate management promised.” The letter goes on to state that Cypress will not guarantee the same valuation in acquiring Ramtron should the chipmaker’s value “continue to slip away.”
The Cypress letter also asks if Ramtron’s board has re-evaluated the offer in light of Ramtron’s second quarter results and current stock price, and how Ramtron’s strategic review process is being handled. The full letter is available here:
Update July 23, 2012 — Cypress extended its tender offer to acquire all of the outstanding stock of Ramtron for $2.68 per share in cash to 5:00 pm EST on August 3, 2012. The offer was previously scheduled to expire at midnight on July 19, 2012.
In addition, Cypress asserted that the waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to its acquisition of Ramtron has expired and that Cypress has received the necessary regulatory clearance pursuant to the German merger control laws. Cypress does not believe that any other regulatory approvals are necessary in connection with the acquisition.
“Ramtron’s contention that we have ‘bypassed’ its strategic review process — a process that exists only because of our prior offers — is simply untrue,” said T.J. Rodgers, president and CEO, Cypress. “We have repeatedly said that we prefer a negotiated transaction and have attempted to engage with Ramtron on numerous occasions. Ramtron continues to insist that Cypress agree to a ‘standstill’ and other restrictions that would impede our ability to pursue a transaction.”
Greenhill & Co., LLC is acting as financial advisor to Cypress and dealer manager for the offer, and Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal counsel.
Update July 6, 2012 — Despite Cypress raising its offer by $0.20/share, Ramtron said no, unanimously concluding that the "tender offer is inadequate, does not reflect the intrinsic value of the Company, and is not in the best interest of Ramtron and its stockholders."
RMTR expects the market for ferroelectric magnetic random access memory (Fe-RAM or FRAM) is large enough to support strong, long-term growth for the company, and pointed to a series of 2012 new product introductions and increased focus on integrated semiconductors complementary to specialty memory as reasons to reject CY’s offer. The Board also pointed out that RMTR stock closed on July 3 at $3.01/share, above the $2.68/share offer price.
The basis for the Board’s recommendation is set forth in the Schedule 14D-9 Ramtron is filing today with the Securities and Exchange Commission (SEC), which will be mailed shortly to stockholders.
Ramtron is exploring strategic alternatives such as selling the company, aligning with investors or joint venture partners, continuing its current growth plans, or another option. Cypress declined an invitation to participate in a review of these options.
June 22, 2012 — Earlier in June, Cypress made Ramtron an offer of $2.48/share in a cash deal. Ramtron declined the deal, stating that its Board of Directors “reviewed and carefully considered the unsolicited proposal dated June 12 from Cypress…with the assistance of its financial and legal advisors, and concluded that the proposal of $2.48 per share of common stock does not reflect the intrinsic value of the Company and is not in the best interest of Ramtron stockholders.”
Now, CY is countering with a $2.68/share cash offer, which it notes is a 48% premium over RMTR’s closing price of $1.81 per share on June 11, 2012. CY is also commencing a tender offer to purchase all outstanding shares of Ramtron at the revised per-share price.
Ramtron’s Board intends to advise stockholders of its recommendation within ten business days by making available to stockholders and filing with the Securities and Exchange Commission a Schedule 14D-9. The offer and withdrawal rights will expire at 12:00 midnight EST, on July 19, 2012, unless the offer is extended.
Cypress has made 2 prior offers for Ramtron and had both turned down. After the June 12 offer was denied, Ramtron’s Board invited Cypress to explore other strategic options with the company. Cypress president and CEO T.J. Rodgers called the idea an “uncertain strategic review process that could take many months.”
Rodgers stated, “Ramtron asked that we agree to a highly restrictive ‘standstill’ agreement that would prevent us from proceeding with our offer for at least two years. Our offer is not subject to any due diligence or financing conditions, we do not require access to any of Ramtron’s confidential information, and we are unwilling to agree to that type of restriction on our ability to take our offer directly to Ramtron’s stockholders.”
Ramtron chairman Dr. William G. Howard counters that it is “a transformed company that is now poised to fully exploit the vast untapped opportunity for F-RAM-based low energy and high data integrity solutions in the semiconductor market.”
Cypress makes high-performance, mixed-signal, programmable semiconductors and SRAM memory chips. Ramtron is a fabless semiconductor company that designs, develops, and markets specialized semiconductor memory and integrated semiconductor solutions.
FRAM is ferroelectric random access memory, sometimes called FeRAM. SRAM is static random access memory.