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TheStreet Open House

Acquisition Of TriQuint Semiconductor, Inc. By RF Micro Devices, Inc. May Not Be In Shareholders' Best Interests

SAN DIEGO and HILLSBORO, Ore., Feb. 24, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of TriQuint Semiconductor, Inc. (NASDAQ: TQNT) by RF Micro Devices, Inc. (NASDAQ: RFMD). On February 24, 2014, the two companies announced the signing of a definitive agreement pursuant to which the two companies will combine to form a new company. Under the agreement, TriQuint shareholders will receive 1.675 shares of the combined company's common stock in exchange for each share of TriQuint common stock, a cash value of $9.73 per share.

Robbins Arroyo LLP.

Is the Proposed Merger Best for TriQuint and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at TriQuint is undertaking a fair process to obtain maximum value and adequately compensate TriQuint shareholders.  As an initial matter, the $9.73 merger consideration represents a premium of only 5.4% based on TriQuint's closing price on February 24, 2014.  That premium is substantially below the average one day premium of nearly 51% for comparable transactions in the past three years.  Further, there are currently four analysts with target prices higher than the $9.73 merger consideration, including an analyst at DA Davidson & Company, who set a price of $10.00 on July 25, 2013.

In addition, on February 5, 2014, TriQuint released its financial results for its fourth quarter 2013, reporting increases in revenue as well as record Mobile Devices revenue in the second half of 2013. Specifically, TriQuint reported that its fourth quarter revenue increased 7% over the third quarter 2013 and 15% over the fourth quarter 2012, reaching $267.7 million. Also, TriQuint's Mobile Devices revenue for the second half of 2013 increased 66% over the first half of 2013 and the company's Networks revenue for the fourth quarter grew 21% over the same quarter 2012

Commenting on these results, TriQuint's President and Chief Executive Officer, Ralph Quinsey, remarked, "TriQuint's revenue for Q4 was $267.7 million, and non-GAAP earnings per share was $0.16, both above the midpoint of our guidance and well above our results in Q4 of 2012... We anticipate revenue growth and significant year over year improvement in profitability during 2014. Excluding Q1 we expect non-GAAP gross margins to average 40% and non-GAAP earnings for 2014 to be 5 to 6 times our 2013 results on improved product mix and focused cost reductions."

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

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