9 September 2014

GSI rejects proposed acquisition by GigOptix

GSI Technology Inc of Sunnyvale, CA, USA - a provider of static random access memory (SRAM) products primarily incorporated in networking and telecoms equipment - says that its board of directors has unanimously rejected the unsolicited, non-binding and conditional proposal to acquire the firm, announced on 19 August by GigOptix Inc of San Jose, CA, USA (a fabless supplier of analog semiconductor and optical communications components for fiber-optic and wireless networks).

GigOptix proposed to acquire all of GSI’s outstanding common stock for $6.50 per share, consisting of a combination of GigOptix common stock and cash (including $3.17 per share of GSI’s own cash paid as a special dividend).

GSI communicated its response in a letter from chairman, CEO & president Lee-Lean Shu to GigOptix’s co-founder, chairman, CEO & president Avi Katz. “After carefully and thoroughly reviewing your proposal, in consultation with its financial advisors Robert W. Baird & Co Inc and legal advisors DLA Piper LLP (US), our board has unanimously concluded that pursuing your unsolicited proposal would be contrary to the best interests of our stockholders,” said Shu. “The board strongly believes that GSI Technology’s prospects as a strong independent company are excellent and that our goal of continuing to build long-term stockholder value will be best served by remaining focused on the execution of our business plan,” he adds.

“We are disappointed that GSI Technology’s board of directors, without even engaging in a discussion with us, has rejected our acquisition proposal and chosen to deny its stockholders the opportunity to achieve a substantial premium and immediate liquidity for their shares,” states Katz in a letter responding to GSI’s board. “We are confident that moving forward promptly to consummate a transaction is in the best interests of all parties,” he adds. “We are offering GSI Technology’s stockholders superior value and the opportunity to participate in the upside of the combined company, which we believe is a better outcome than GSI Technology remaining an independent company,” Katz continues. The combination should offer “an increasingly exciting set of solutions for customers”, comprising both GSI’s high-performance memory products for networking and telecoms equipment and GigOptix’s high-speed communications components. “Together, this would allow us to strengthen the value proposition that we collectively provide to our customers through a wider range of companion and complementary products and more effectively challenge our respective competitors in the marketplace,” Katz believes.

“In light of the value which we believe this combination brings, we continue to seek a negotiated agreement with GSI Technology, and will continue to explore all necessary steps to ensure that GSI Technology’s stockholders are provided with the opportunity to realize the value inherent in our proposal,” Katz states. “We therefore urge the GSI Technology board of directors to do the right thing and immediately engage in meaningful discussions with us so that we may deliver significant value to each of our stockholders.”

See related items:

GigOptix proposes to acquire memory product firm GSI for $161m

Tags: GigOptix

Visit: www.gigoptix.com

Visit: www.gsitechnology.com