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Freescale Took Scenic Buyout Route

Prior to selling out to a group of private equity firms, Freescale Semiconductor (FSL) had its own sights on the chip business of Philips Semiconductor and was also exploring a merger with another company.

Meanwhile, the buyout offer that Freescale ultimately accepted from a private equity consortium led by Blackstone Group was at the low end of a rival bid from Kohlberg Kravis Roberts and Silver Lake Partners, according to a report filed with the Securities and Exchange Commission Tuesday.

The filing sheds new light on one of the biggest private equity technology buyouts in history, which was marked by a rare bidding war between the usually clubby private equity players.

It also suggests that no one else is likely to step in and top Blackstone's current bid. While Freescale has contacted six other parties about a potential transaction, in keeping with the 50-day "go shop" provision in the agreement, it acknowledged that none have submitted a proposal to pursue a strategic transaction with the company.

Freescale, a former division of Motorola (MOT), makes chips for the fast-growing cell phone handset market, as well as integrated circuits sold into less glamorous, but stable markets such as automotive and industrial equipment. The company, which had $5.4 billion in annual sales last year, announced in mid-September its $17.6 billion buyout by the private equity consortium of Blackstone Group, Carlyle Group, Permira Funds and Texas Pacific Group.
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