Microsemi Raises Buyout Bid For PMC-Sierra

The new cash-and-stock offer of $12.05 per outstanding PMC share comes two days after PMC’s board rejected Microsemi’s prior offer of $11.97 per share, citing “recent stock market volatility exacerbated by recent geopolitical events”. As per the latest report, the brokerage house announces the price target to $42 per share. The Electronic Components company is now valued at $3.56 billion and its share price closed the last trading session at $36.99.

Microsemi (NASDAQ:MSCC) and Apple (NASDAQ:AAPL) supplier Skyworks Solutions (NASDAQ:SWKS) grappled again Wednesday for chipmaker PMC-Sierra (NASDAQ:PMCS) amid frenzied industry consolidation that also saw On Semiconductor (NASDAQ:ON) agree to buy Fairchild Semiconductor (NASDAQ:FCS).

In the $2.3 billion cash-and-stock deal, PMC shareholders would receive $9.22 in cash and 0.0771 of a share of Microsemi common stock for each share of PMC common stock.

Microsemi had on October 30 hiked its offer to buy PMC-Sierra, topping a bid from Skyworks, as the bidding war to buy the chip-equipment maker escalated.

CEO (chief executive officer) of Skyworks David Aldrich stated, “Specifically, we plan to leverage PMC’s innovative storage systems, flash controllers, optical switches, and network infrastructure solutions to expand our engagements with a few of the world’s leading OEMs and ODMs as well as emerging hyperscale data center customers”. The implied enterprise value is now $2.3 billion, net of PMC’s net cash balance as of September 27. PMC-Sierra said that Skyworks’ all-cash offer provided greater value to shareholders against Microsemi’s cash-stock offer. Currently, Skyworks is focused on providing services in the technology, defense, and industrial sectors.