News Article
Cadence proposes to acquire Mentor Graphics
Mentor Graphics is reluctant to accept a $1.6 billion proposal from Cadence Design Systems even at a 30% premium offer.
Cadence Design Systems announced that it proposed to acquire Mentor Graphics Corporation for $16.00 per share in cash. The proposal represents a 30% premium over the closing price of Mentor Graphics common stock on June 16, 2008. The transaction is valued at $1.6 billion.
"A combined Cadence/Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next generation product development," said Michael J. Fister, president and chief executive officer of Cadence. "Together, we will accelerate the rate and efficiency of customers' innovation by making it possible for them to develop products that better meet end user needs."
"We believe the combination of Cadence and Mentor Graphics delivers significant benefits to both companies' shareholders that are simply too compelling to ignore," said Kevin S. Palatnik, senior vice president and chief financial officer of Cadence. "Our $16.00 per share all cash proposal provides Mentor Graphics shareholders with a substantial cash premium for their investment in Mentor Graphics. It remains our strong preference to work co-operatively with Mentor Graphics, and to immediately commence discussions with Mentor Graphics regarding our proposal."
In a letter sent to the board of directors of Mentor Graphics, Michael J. Fister, president and chief executive officer of Cadence, states his disappointment over the unwillingness of Mentor Graphics to participate in discussions, despite Cadence’s increased efforts, about the acquisition.
The proposal has been made public by Cadence due to the apparent reluctance of Mentor Graphics to consider the offer.
Following these actions Mentor Graphics responded and acknowledged the receipt of an unsolicited proposal by Cadence Design Systems. Mentor Graphics also confirmed that it previously rejected the proposal.
"As we recently indicated to Cadence, we reviewed Cadence's proposal and analyzed both the price proposed and the risks associated with obtaining antitrust approval for a combination between the companies,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Following this review, we concluded that not only was the price insufficient to support a transaction but that the risks of not gaining regulatory approval were sufficiently high that the ability of the parties to consummate the transaction would be in jeopardy. For these and other reasons, our Board unanimously rejected the proposal."
Cadence’s proposal is subject to a number of conditions, including a mutually agreeable merger agreement, the satisfaction of other customary conditions and the receipt of regulatory approvals.
"A combined Cadence/Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next generation product development," said Michael J. Fister, president and chief executive officer of Cadence. "Together, we will accelerate the rate and efficiency of customers' innovation by making it possible for them to develop products that better meet end user needs."
"We believe the combination of Cadence and Mentor Graphics delivers significant benefits to both companies' shareholders that are simply too compelling to ignore," said Kevin S. Palatnik, senior vice president and chief financial officer of Cadence. "Our $16.00 per share all cash proposal provides Mentor Graphics shareholders with a substantial cash premium for their investment in Mentor Graphics. It remains our strong preference to work co-operatively with Mentor Graphics, and to immediately commence discussions with Mentor Graphics regarding our proposal."
In a letter sent to the board of directors of Mentor Graphics, Michael J. Fister, president and chief executive officer of Cadence, states his disappointment over the unwillingness of Mentor Graphics to participate in discussions, despite Cadence’s increased efforts, about the acquisition.
The proposal has been made public by Cadence due to the apparent reluctance of Mentor Graphics to consider the offer.
Following these actions Mentor Graphics responded and acknowledged the receipt of an unsolicited proposal by Cadence Design Systems. Mentor Graphics also confirmed that it previously rejected the proposal.
"As we recently indicated to Cadence, we reviewed Cadence's proposal and analyzed both the price proposed and the risks associated with obtaining antitrust approval for a combination between the companies,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Following this review, we concluded that not only was the price insufficient to support a transaction but that the risks of not gaining regulatory approval were sufficiently high that the ability of the parties to consummate the transaction would be in jeopardy. For these and other reasons, our Board unanimously rejected the proposal."
Cadence’s proposal is subject to a number of conditions, including a mutually agreeable merger agreement, the satisfaction of other customary conditions and the receipt of regulatory approvals.
