NEW YORK (TheStreet) -- Cypress Semiconductor Corp. (CY) is under investigation by the former attorney general of Louisiana, Charles Foti, and law firm Kahn Swick & Foti to determine whether consideration and the process that led to its merger deal with embedded systems specialist Spansion (CODE) are adequate.
The firm will also investigate whether the consideration undervalues Spansion.
Yesterday, law firm Robbins Arroyo announced that it is investigating whether the board of directors at Spansion is undertaking a fair process to obtain maximum value and to adequately compensate its shareholders.
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Under the terms of the proposed transaction, Spansion shareholders will receive 2.457 Cypress shares valued at $25.63, for each Spansion share of common stock they own.
The two companies agreed to an all-stock merger valued at $4 billion on Monday, and the combined company is expected to generate more than $2 billion in revenue a year.
Shares of Cypress are up 1.59% to $12.11 in late morning today.
Separately, TheStreet Ratings team rates CYPRESS SEMICONDUCTOR CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CYPRESS SEMICONDUCTOR CORP (CY) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income and growth in earnings per share. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."