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Acquisition Of Supertex, Inc. By Microchip Technology, Inc. May Not Be In Shareholders' Best Interests

SAN DIEGO and SUNNYVALE, Calif., Feb. 10, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Supertex, Inc. (NASDAQ: SUPX) by Microchip Technology, Inc. (NASDAQ: MCHP).  On February 10, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Microchip Technology will acquire all of the outstanding shares of Supertex stock for $33.00 per share in cash.

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Is the Proposed Merger Best for Supertex and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at Supertex is undertaking a fair process to obtain maximum value and adequately compensate Supertex shareholders.

On January 21, 2014, Supertex released its third quarter 2013 earnings, reporting strong year-over-year increases in net sales, net income, and net margin. Specifically, Supertex reported net sales of $ 17,351,000, an increase of 21% over the comparable quarter 2012.  The company also reported net income on a GAAP basis of $2,677,000 or $0.23 per diluted share as compared with $1,431,000, or $0.12 per dilutes share for the same period of the prior fiscal year.  Further, Supertex increased its net margin 10% over the same nine month period in 2012.  Finally, Supertex beat Bloomberg analyst estimates for EPS by 14.29% and has beaten Bloomberg EPS estimates in eight of the last ten quarters.

In commenting on the these results, the company's President and Chief Executive Officer, Dr. Henry C. Pao, stated, "Overall it was a very good quarter….  We continue to achieve design wins in many of our new products, some of which have gone to volume production faster than expected and we have many more innovative products in the pipeline. We're meeting our operating objectives. Gross margin was 56% for both the third fiscal quarter and the nine month period which is running nearly eight percentage points higher than last year."

Given these facts, Robbins Arroyo LLP is examining the Supertex board of directors' decision to sell the company to Microchip Technology now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects. 

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