SAN JOSE, Calif., Jun 12, 2012 (BUSINESS WIRE) –
Cypress Semiconductor Corporation
/quotes/zigman/70818/quotes/nls/cy CY
-5.03%
today announced
that it has submitted a proposal to Ramtron International Corporation
/quotes/zigman/67029/quotes/nls/rmtr RMTR
+4.02%
to acquire all of its outstanding stock for $2.48 per
share in cash. This offer represents a 37% premium to Ramtron’s closing
stock price on June 11, 2012.
“We believe that our offer provides compelling value to Ramtron’s
stockholders,” said T.J. Rodgers, President and Chief Executive Officer
of Cypress. “Last year, we attempted to negotiate an acquisition of
Ramtron, but our offer of $3.01 per share–which represented the same 37%
premium to Ramtron’s then-current stock price as we are offering
today–was summarily rejected. Soon thereafter, Ramtron sold almost 20%
of its stock in a dilutive public offering at a net price of $1.79 per
share.
“At this time, we call on Ramtron’s Board of Directors to act in the
best interests of its stockholders by meeting with us to seriously
discuss our compelling proposal. We believe that Cypress would benefit
Ramtron’s customers, providing them with a more stable source of supply,
greater research and development resources and better support from a
much larger sales channel. We also believe the combination would provide
Ramtron’s employees with more opportunity for long-term success as part
of a larger, more global organization,” Rodgers continued.
In a letter sent to Ramtron today, Cypress stated that it would prefer a
negotiated transaction. Cypress has engaged Greenhill Co., LLC as
financial advisor and Wilson Sonsini Goodrich Rosati, Professional
Corporation, as legal counsel.
The full text of the letter sent from Cypress to Ramtron today — along
with letters sent on March 8, March 10 and April 11, 2011 — are set
forth below:
June 12, 2012
BY EMAIL
Dr. William G. Howard, Jr., Chairman of the Board of Directors
Mr. Eric A. Balzer, Director and Chief Executive Officer
Ramtron International Corporation
1850 Ramtron Drive
Colorado Springs, CO 80921
Gentlemen:
I am writing to formally convey Cypress Semiconductor’s proposal to
acquire Ramtron International Corporation for $2.48 per share in cash.
This represents a premium of 37% over Ramtron’s closing price of $1.81
per share on June 11, 2012. We believe that this all-cash transaction,
which has been unanimously approved by our Board of Directors, is
compelling for Ramtron and its stockholders. Our proposal would deliver
immediate, certain value to Ramtron’s stockholders that is far superior
to what we believe that you can reasonably expect to achieve as a
standalone company.
We believe that an acquisition can be completed expeditiously and are
prepared to commence a cash tender offer with no financing or due
diligence conditions. We have retained Greenhill Co., LLC as our
financial advisor and Wilson Sonsini Goodrich Rosati, Professional
Corporation, as our legal counsel. We are confident that a transaction
would receive all necessary regulatory approvals, including antitrust
clearances.
We hope to work with you on a negotiated basis to complete this
transaction successfully, and are prepared to deliver a draft merger
agreement and begin discussions immediately. I suggest that our
respective financial and legal advisors meet at your earliest
convenience to work toward the goal of announcement of a definitive
agreement in the very near future.
It has been about two years since I first approached you about a
possible transaction between our two companies and over a year since we
delivered a formal proposal to acquire Ramtron. As you will recall, that
proposal (at $3.01 per share) was for a 37% premium over your
then-current stock price on March 8, 2011–the same premium we are
offering today. Our offer made clear that we were prepared to commence
due diligence immediately and would deliver a merger agreement with
minimal closing conditions. We were deeply disappointed when, two weeks
after we provided you with our offer, you and your Board of Directors
responded that our offer was so low that it was not even worth your time
to make a counter proposal.
Since then, a number of events have convinced us that your response did
not reflect the best interests of your stockholders. First, soon after
you rejected our offer, Ramtron sold almost 20% of its stock in a
dilutive public offering at a net price of $1.79 per share, which I
found extremely surprising in light of your comments regarding our offer
and its 68% premium to that price. Second, since our offer Ramtron has
had cumulative net losses of five cents per share. Third, your
stockholders have been increasingly vocal about their desire for you to
sell Ramtron. These factors, along with your history of rejecting
out-of-hand our prior offer, have convinced us that we must make our
offer public at this time so that your stockholders are aware of our
efforts. I have attached copies of my prior letters to you to this
letter.
Although we would prefer to proceed through a negotiated agreement, we
are fully committed to this transaction, and will take the steps
necessary to complete it. We believe that a transaction between our two
companies would be well received by your stockholders, and we are
committed to providing them with an opportunity to express their views
on our proposal.
This letter does not represent or create any legally binding or
enforceable obligations. No such obligations will be imposed on either
party unless and until a definitive agreement is signed by both Cypress
and Ramtron.
We request a response to our proposal by 5:00 p.m. Pacific Daylight Time
on Tuesday, June 19, 2012. In light of the significance of this proposal
to your stockholders and ours, as well as the potential for selective
disclosure, we are publicly releasing the text of this letter.
Very truly yours,
T.J. Rodgers
President and Chief Executive Officer
cc: Greenhill Co., LLC
Wilson Sonsini Goodrich Rosati, Professional Corporation
Annex
Prior Correspondence Between Cypress and Ramtron
Text of the letter sent by Cypress to Ramtron on March 8, 2011
Dear Mr. Balzer:
The purpose of this letter is to propose the acquisition of Ramtron
International Corporation by Cypress Semiconductor Corporation for $3.01
per share in cash, a 37% premium over Ramtron’s closing price of $2.20
on March 8, 2011 and a 32% premium over Ramtron’s 15-day,
volume-weighted trading price of $2.28. This premium exceeds the 30%
premium reported in comparable transactions in 2011–and is 2.4 times
higher than the premium paid by Microchip Technology, Inc. in its
acquisition of Silicon Storage Technology, Inc. in a 2010 transaction
which is very similar to this proposed transaction. We have the cash on
hand to complete this transaction in an expeditious manner.
We believe the transaction would be favorable not only to Ramtron’s
shareholders, but also–and particularly–to Ramtron’s customers. Relative
to Ramtron alone, the combined company would serve its customers with 1)
a more stable source of supply, consisting of two non-volatile
technologies from five wafer-fabrication plants (three from Cypress), 2)
a lower manufacturing cost structure due to Cypress’s low wafer and
assembly test manufacturing costs, 3) shorter leadtimes due to our
internal 45-day fab cycle time and 7-day assembly test cycle times, 4)
access to high density and higher performance products fabricated in
Cypress’s advanced non-volatile technologies, 0.13-micron (in production
in three fabs) and 0.65-micron (in production at UMC), 5) better support
from Cypress’s 400-person Sales, Marketing and Field Applications
Marketing teams, and 6) the lower overhead costs that would result from
combining our Colorado Springs and other overhead operations.
In particular, we believe that as a combined company, we could bring
immediate relief to Ramtron’s customers by rationing the scarce supply
of FeRAMs to those customers who specifically need that technology,
while immediately serving the needs of the rest of Ramtron’s other
customers with Cypress’s high-quality, high-reliability, pin-compatible
products, manufactured in our SONOS technology.
We would like to enter into a more substantial conversation with Ramtron
regarding the details of this offer on an expedited schedule, so as to
address the current market supply problem as quickly as possible. Of
course, we will take the time to negotiate thoroughly and in good faith.
We plan to make this offer public at the close of business on March 15,
2011.
Sincerely,
T.J. Rodgers
President CEO
cc: Cypress Board of Directors
Ramtron Board of Directors
Text of the letter sent by Cypress to Ramtron on March 10, 2011
Dear Mr. Balzer:
This letter documents the comments I made to you in our telephone
conversation yesterday.
Here is the supplemental information that I provided:
–
Cypress anticipates that there will be minimal due diligence (two
weeks or less) required for a Ramtron-Cypress merger.
–
We are prepared to sign a confidentiality agreement immediately as a
condition of commencing due diligence.
–
Cypress has studied the Hart-Scott-Rodino process and anticipates no
regulatory problems.
–
Cypress intends to accelerate all employee options and buy them out.
–
Cypress is prepared to deliver a definitive merger agreement with
minimal closing conditions and a fiduciary-duty out-clause for a
superior proposal (subject to a reasonable breakup fee and Cypress’s
right to match that superior offer).
–
Cypress will work cooperatively with Ramtron to create a win-win deal
for both companies.
Sincerely,
T.J. Rodgers
President CEO
cc: Cypress Board of Directors
Ramtron Board of Directors
Text of the letter sent by Cypress to Ramtron on April 11, 2011
Dear Bill:
I’m writing this letter to close the loop on our recent MA discussions.
On March 8, 2011, after a lot of careful deliberation, Cypress made an
offer of acquisition to Ramtron with an embedded 37% premium to market.
We felt–and still feel–that our offer would be attractive to your
shareholders.
What we heard from you telephonically and in a letter dated March 22,
2011, was that you felt the offer was too low–so low, in fact, that it
was not worth your while to make a counter proposal.
Although we do not agree with that position, we accept it and are
officially withdrawing our offer to acquire Ramtron at this time. Please
let me know if you would reconsider your position.
On another topic, I have enclosed a chart of Ramtron’s share price on
which I have marked the dates of my acquisition proposal letter and your
response to it. As you can see, there was a significant rise in
Ramtron’s price after those events. While no one can say what drives the
market up or down–and I am not trying to imply anything here–you might
want to take a look at the security measures that were employed by
Ramtron regarding this proposed transaction.
Sincerely yours,
T.J. Rodgers
President CEO
cc: Cypress Board of Directors, Larry Sonsini
About Cypress
Cypress delivers high-performance, mixed-signal, programmable solutions
that provide customers with rapid time-to-market and exceptional system
value. Cypress offerings include the flagship PSoC 1, PSoC 3, and PSoC 5
programmable system-on-chip families and derivatives, CapSense touch
sensing and TrueTouch solutions for touchscreens. Cypress is the world
leader in USB controllers, including the high-performance West Bridge
solution that enhances connectivity and performance in multimedia
handsets, PCs and tablets. Cypress is also the world leader in SRAM
memories. Cypress serves numerous markets including consumer, mobile
handsets, computation, data communications, automotive, industrial and
military. Cypress trades on the Nasdaq Global Select Market under the
ticker symbol CY. Visit Cypress online at
www.cypress.com .
Additional Information
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. This communication relates to a
potential business combination transaction with Ramtron International
Corporation (“Ramtron”) proposed by Cypress Semiconductor Corporation
(“Cypress”), and is not a substitute for any tender offer statement or
any other document that Cypress may file with the Securities and
Exchange Commission (the “SEC”) in connection with the proposed
transaction. No tender offer for the shares of Ramtron has commenced at
this time. In connection with the proposed transaction, Cypress may file
tender offer documents with the SEC. Any definitive tender offer
documents will be mailed to stockholders of Ramtron. INVESTORS AND
STOCKHOLDERS OF RAMTRON ARE URGED TO READ THESE AND OTHER DOCUMENTS
FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and stockholders of Ramtron will be
able to obtain free copies of these documents (if and when available)
and other documents filed with the SEC by Cypress through the web site
maintained by the SEC at
http://www.sec.gov .
Forward-Looking Statements
This release may be deemed to contain forward-looking statements,
which are subject to the safe harbor provisions of the Private
Litigation Reform Act of 1995. These forward-looking statements include,
among other things, statements Cypress’s proposal to acquire Ramtron and
the benefits of Cypress’s potential acquisition of Ramtron, each of
which involve risks and uncertainties. Readers are cautioned that these
forward-looking statements are only predictions and may differ
materially from actual future events or results due to a variety of
factors, including the business and economic conditions and growth
trends in the semiconductor industry and in various geographic regions;
our ability to manage financial risk; and other factors listed in
Cypress’s most recent reports on Form 10-K, 10-Q and 8-K. The
information above speaks only as of the date of this release.
Cypress, the Cypress logo, PSoC, PowerPSoC, CapSense and West Bridge
are registered trademarks and Cypress Developer Community, PSoC Creator
and TrueTouch are trademarks of Cypress Semiconductor Corp. All other
trademarks are property of their owners.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50307554lang=en
SOURCE: Cypress Semiconductor Corp.
Cypress Semiconductor Corp.
Brad W. Buss, 408-943-2754
EVP Finance Administration and CFO
or
Greenhill Co. LLC
415-216-4100
Copyright Business Wire 2012
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