DOW JONES NEWSWIRES
Microchip Technology Inc. (MCHP) is no longer considering a
transaction with Atmel Corp. (ATML) and is withdrawing its slate of
nominees for the chip maker's board.
Microchip's move comes about three months after acquisition
partner ON Semiconductor Corp. (ONNN) withdrew from their joint
proposal to acquire Atmel, citing unforeseen deterioration in the
semiconductor market.
On Tuesday, Microchip Chief Executive Steve Sanghi said the
company was no longer able to put a value on Atmel and noted that
based on Atmel's first-quarter guidance, the company's revenue will
have declined more than 30% since the companies first made the
$5-a-share takeover offer on Oct. 1, 2008.
In response to the withdrawn bid, Atmel said it looks forward to
focusing exclusively on its transformation plan. Earlier this
month, the company reported its third consecutive quarterly loss.
The company has also announced plans to cut its North American work
force by 11% and close nonmanufacturing facilities to cut
costs.
In December, Microchip submitted a slate of seven board nominees
to Atmel as it mulled whether to continue pursuing the rival chip
maker.
Atmel, which makes chips used in several industries, including
automobiles, satellite radios and touch-screen displays, rejected
the companies' original offer, claiming the deal undervalued the
company.
Depressed share prices made several chip companies attractive as
acquisition targets last fall, but shareholders scoffed at offers
seen as undervaluing the long-term prospects for the companies
despite hefty premiums. Since then, however, a host of
semiconductor-related companies slashed their fourth-quarter
estimates and reported disappointing results as consumers cut back
on computer and other technology-relates purchases.
Atmel shares fell 1.4% to $3.64 in after-hours trading and are
off 21% since November.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964;
lauren.pollock@dowjones.com