Microchip Technology the high bidder for Atmel Corp. | Business | gazette.com

Oct 14, 2024

Business Writer

Dialog Semiconductor plc said Thursday it won't try to outbid Microchip Technology Inc. for California-based Atmel Corp., which operates a 1,000-employee chip manufacturing plant in Colorado Springs.

That leaves Chandler, Ariz.-based Microchip as the only bidder for Atmel with a $3.4 billion offer that topped a September deal Atmel agreed to with Dialog. Atmel told Dialog Tuesday it would end its merger agreement with the London-based chipmaker and accept Microchip's bid unless Dialog raised its offer by 4 p.m. Tuesday. Atmel must pay Dialog $137.3 million if it backs out of the merger. Neither Atmel nor Microchip responded Thursday to Dialog's announcement.

"We have concluded that it is not in the best interests of our shareholders to increase the offer price for Atmel," Dialog CEO Jalal Bagherli said in a news release issued Thursday. "We believed the acquisition was the right strategic decision for us, and we are disappointed that it did not come to fruition."

Dialog's cash-and-stock offer was originally valued at $4.6 billion, but the value of the deal dropped sharply as a result of a 42percent decline in the value of its stock since the deal was announced. Atmel said in December it had received an unsolicited bid from an acquirer it did not name. Atmel directors initially stuck with the Dialog deal, but opened talks with the bidder, which was Microchip. On Tuesday, Atmel's board said Microchip's $8.15-per-share bid - $7 in cash and $1.15 in Microchip stock - had topped the value of the Dialog offer it had accepted.

Atmel's stock fell 3 cents, or 0.4 percent, to $7.93 on Thursday, while Microchip shares rose 73 cents, or 1.8 percent, to $42.04. Dialog shares fell 6 cents to $27 before the company announced it wouldn't try to outbid Microchip.

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Business Writer