SAN FRANCISCO -- The tech industry's recent track record of unsolicited acquisition offers isn't inspiring.
The two chipmakers raised the stakes in their joint pursuit of Atmel (ATML) Wednesday by announcing a plan to oust Atmel's board and replace it with a crew more amenable to a deal.
Wall Street was decidedly un-enthused by the move into hostile territory.Shares of Atmel, Microchip and On Semi were all in decline in recent trading Wednesday. Investors had been expecting Microchip and On Semi to increase their previous bid of $5 a share for Atmel, says one hedge fund manager speaking on condition of anonymity because he was trading some of the stocks involved. Instead, the pair kept the bid at $5 a share, or $2.3 billion in total, and threw down the gauntlet of a proxy fight to replace Atmel's board members. Proxy fights are costly and distracting affairs for all parties involved, and success is never assured. Just last month, Vishay Intertechnology (VSH) saw its plans to take over International Rectifier (IRF) go up in smoke when IRF shareholders voted against a slate of three rival directors for the board nominated by Vishay. Whether MicroChip and On Semi will fare any better at Atmel's annual shareholder meeting -- expected sometime this spring -- remains to be seen. The two companies initially announced a plan to takeover Atmel in early October, with Microchip laying claim to Atmel's microcontroller business and On Semi eyeing the radio frequency and automotive chip businesses. The rest of Atmel would be sold to the highest bidder following the merger.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV