Transmeta rejects Riley Investment's offer for the company

By Lisa Kerner

Charlotte, N.C., Feb. 28 - Transmeta Corp. turned down an offer from Riley Investment Management LLC to acquire the company for $15.50 per share.

"We believe that Riley Investment Management's indication of interest undervalues the company's assets, business and opportunities," Transmeta chairman Hugh Barnes said in a Feb. 28 letter to Riley included in a form 8-K filing with the Securities and Exchange Commission.

Riley, with an 8.3% stake in Transmeta, had extended its offer deadline to Feb. 28. Transmeta considered Riley's offer highly conditional, although it was not contingent on financing or due diligence.

On Feb. 7, Transmeta announced it had retained Piper Jaffray & Co. to assist the board of directors and management in identifying options to enhance shareholder value.

Riley has been critical of Transmeta's strategic direction and demanded it been allowed to designate four new members to Transmeta's board.

The investor has also filed a shareholder derivative lawsuit against Transmeta and its board members concerning recent bonus payments and option grants, as well as the company's refusal to provide requested information.

Santa Clara, Calif.-based Transmeta develops computing, microprocessor, semiconductor technologies and related intellectual property.

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