Cypress Sends Updated Superior Proposal to Integrated Silicon Solution, Inc. | Cypress Semiconductor
Cypress Sends Updated Superior Proposal to Integrated Silicon Solution, Inc.
SAN JOSE, Calif., June 22, 2015 – Cypress Semiconductor Corp. (NASDAQ: CY) today announced that its President and Chief Executive Officer, T.J. Rodgers, sent the following letter to Jimmy S.M. Lee, Executive Chairman of the Board of Directors of Integrated Silicon Solution, Inc.
June 22, 2015
Jimmy S. M. Lee
Integrated Silicon Solution, Inc.
1623 Buckeye Drive
Milpitas, California 95035
I trust that the ISSI Board of Directors now understands that Cypress Semiconductor places strategic, not just financial, value on the acquisition of ISSI. Of course, you have known of this strong and unwavering interest, given your personal dialogues with us over the last year. As we said in those meetings, we believe that the transaction would benefit not only ISSI shareholders, but also ISSI customers due to the increased breadth and strategic capabilities of the product offerings of the combined companies; for example, to provide and warranty all the memory types (NOR Flash, SRAM, F-RAM and DRAM) needed to implement an automotive embedded system.
With that vision unchanged, Cypress is increasing its offer to acquire ISSI to $22.25 per share, while maintaining its previously outlined ticking fee of $0.10 per share per quarter beginning October 1, 2015. Additionally, Cypress will put into escrow through our lawyers today a merger agreement pre-negotiated with ISSI and signed by me to further demonstrate our sincerity and strong commitment to closing this transaction.
This Cypress proposal is clearly superior to an Uphill proposal at the same price per share, given our inclusion of a ticking fee and our mitigation of regulatory risk. We have gone to great lengths to systematically address ISSI’s concerns by 1) demonstrating committed financing, 2) eliminating regulatory risk by agreeing to possible ISSI SRAM divestitures, 3) adding a ticking fee to compensate for any unforeseen delay in closing, and 4) adding a reverse break-up fee.
Meanwhile, the Uphill Proposal is still plagued with significant governmental (CFIUS) timing and closing risks along with mandated Taiwan divestitures.
If Cypress had been included in your strategic review and sale process, your shareholders would have reaped two significant benefits: a more time-efficient price-discovery process and the capture of a potential incremental $0.56 per share, which was instead wasted on a break-up fee. In addition, the lengthy bidding process has also caused ISSI’s record date to become stale. We believe it should be updated. Your recent tactic of adjourning and reconvening your shareholder meeting preserves the old record date but puts a meaningful portion of the voting in the hands of investors who no longer hold ISSI’s stock.
We are simultaneously releasing this letter to the public. Our offer is now subject only to your countersigning the escrowed merger agreement.
President and Chief Executive Officer
This press release contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company’s offer to acquire ISSI, the Company’s ability to complete the transaction with ISSI, and the Company’s assessment of antitrust risks, including the timing aspects of such risks, associated with the proposed transaction with ISSI. Statements including words such as “believes,” “expects,” “will,” “look forward” or similar expressions are forward-looking statements. Because these statements reflect the Company’s current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties that may affect the Company’s business or future financial results. These risks include, among others, risks associated with the economy; conditions in the overall semiconductor market; acceptance and demand for the Company’s products; technological and development risks; legal and regulatory matters and other competitive factors. Risks and uncertainties related to the proposed acquisition of ISSI include, among others, the ultimate outcome of any possible transaction between the Company and ISSI, including the possibilities that the Company will not pursue a transaction with ISSI and that ISSI will reject a transaction with the Company; the risk that if ISSI’s board of directors agrees to negotiate a definitive acquisition agreement with the Company and the Company and ISSI enter into a definitive agreement with respect to the proposed transaction, that ISSI’s stockholders do not approve the proposed transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; uncertainties as to the timing of the proposed transaction; competitive responses to the proposed transaction; the risk that regulatory or other approvals required for the proposed transaction are not obtained or are obtained subject to conditions that are not anticipated; the risk that other conditions to the closing of the proposed transaction are not satisfied; costs and difficulties related to the closing of the proposed transaction and the integration of ISSI’s businesses and operations with Cypress’s businesses and operations; the inability to obtain or delays in obtaining anticipated cost savings and synergies from the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; litigation relating to the proposed transaction; the inability to retain key personnel, customers and suppliers; and any changes in general economic and/or industry specific conditions. Additional factors that could cause future results or events to differ from those the Company expects are those risks discussed under Item 1A., “Risk Factors,” in Cypress’s Annual Report on Form 10-K for the fiscal year ended December 28, 2014, Cypress’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015, and other reports filed by Cypress with the Securities and Exchange Commission. Please read the “Risk Factors” and other cautionary statements contained in these filings. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise. As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and Cypress’ financial condition and results of operations could be materially adversely affected.
Cypress (NASDAQ: CY) delivers high-performance, high-quality solutions at the heart of today’s most advanced embedded systems, from automotive, industrial and networking platforms to highly interactive consumer and mobile devices. With a broad, differentiated product portfolio that includes NOR flash memories, F-RAM™ and SRAM, Traveo™ microcontrollers, the industry’s only PSoC® programmable system-on-chip solutions, analog and PMIC Power Management ICs, CapSense® capacitive touch-sensing controllers, and Wireless BLE Bluetooth® Low-Energy and USB connectivity solutions, Cypress is committed to providing its customers worldwide with consistent innovation, best-in-class support and exceptional system value. To learn more, go to www.cypress.com.
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