Micrel asks shareholders to reject Obrem proposals, accuses hedge fund of forcing a sale of the company

By Lisa Kerner

Charlotte, N.C., April 25 - Micrel, Inc. once again urged its shareholders to reject the proposals put forth by recently formed hedge fund Obrem Capital Management LLC at Micrel's annual meeting on May 20.

According to Micrel, Obrem is attempting to take over Micrel by ousting the company's board.

Micrel, in an April 25 open letter to stockholders, called Obrem's slate of nominees inexperienced and reiterated its view that Obrem wants representation on the board for the purpose of selling the company "in the face of the most challenging market conditions the industry has seen in years."

On April 16, Micrel announced it was soliciting proxies against Obrem's proposals.

Obrem has never controlled or operated a company, Micrel said, adding that the hedge fund is also attempting to break up a Canadian life sciences company.

Micrel cited its directors' collective 200 years of relevant experience and said they "bring a valuable blend of deep strategic, senior executive, operational and public company board expertise inside and outside of the semiconductor industry."

In its letter, Micrel accused Obrem of making inaccurate and misleading statements about both the company and the semiconductor industry. Micrel said that Obrem has also made misleading assertions about the company's cost structure and financial performance.

Obrem reported the purchase of additional Micrel shares in an April 23 schedule 13D filing with the Securities and Exchange Commission. The hedge fund now has a 15% stake in Micrel.

It was previously reported that Obrem will nominate directors for election to Micrel's board at the company's 2008 annual meeting.

Obrem's nominees are:

• Bill Bradford, a co-founder and general partner of Saguaro Ventures;

• Keith R. Gollust, a founding partner of Gollust, Tierney, and Oliver, a private investment firm;

• Eric Gomberg, a senior investment analyst at Obrem Capital Management;

• Ben Goren, a principal at GCG Capital;

• Keith M. Kolerus, former chairman of the board of ACI Electronics; and

• Andrew Rechtschaffen, founder and managing member of Obrem Capital Management.

Obrem's preliminary proxy statement is also soliciting proxies for removal of Micrel's five current directors and amending the company's bylaws.

Micrel develops and manufactures high-performance analog power integrated circuits (ICs), mixed-signal ICs and digital ICs. The company is based in San Jose, Calif.

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