Microsemi again extends offer for Zarlink's 6% convertibles, plans to redeem remaining notes at par

By Susanna Moon

Chicago, Oct. 13 - Microsemi Corp. said it accepted tenders for C$54,417,000 principal amount, or 87%, of Zarlink Semiconductor Inc.'s 6% subordinated convertible debentures due Sept. 30, 2012.

The company also accepted 123,438,737, or 96%, of Zarlink's outstanding shares.

As a result of receiving the needed tenders, Microsemi will take control of Zarlink's board and operations on Oct. 13 and "will shortly acquire all remaining Zarlink shares not tendered by way of compulsory acquisition under the Canada Business Corporations Act," according to a company press release.

Microsemi will then delist Zarlink from the Toronto Stock Exchange.

Holders will have more time to tender their convertibles, however, before the company redeems them at par.

The company extended the offers to 5 p.m. ET on Oct. 24, from 5 p.m. ET on Oct. 12, to avoid delaying payment to holders, the release noted.

Holders who have not yet tendered their notes are "strongly encouraged to do so" by the new deadline, the company said, failing which Zarlink will redeem them at par on Nov. 11.

Microsemi said on Sept. 22 that it increased its offer to C$1,624.49 per C$1,000 principal amount of 6% convertibles and that Zarlink's board of directors recommended that holders accept the offer. The price per share was increased to C$3.98 from C$3.35.

The offer price for the convertibles was increased from C$1,367.35.

Holders will also receive accrued interest.

The amended price was a 48% premium over the closing price of the convertibles on July 19, the day before the public announcement of Microsemi's proposal to acquire Zarlink, and a 15% premium over the closing price of the convertibles on Sept. 21.

The offers are being conducted through Microsemi subsidiary 0916753 B.C. They began on Aug. 17.

As previously reported, Zarlink rejected Microsemi's previous offer as "financially inadequate and opportunistic" and said the price "significantly undervalued" Zarlink and its future prospects.

The offers for the shares and convertibles required receiving a number of shares that, when combined with the shares already held by Microsemi and the shares underlying the tendered convertibles, represented at least two-thirds of the outstanding shares on a fully diluted basis.

The transaction was not subject to a financing condition. Microsemi has received a financing commitment from Morgan Stanley Senior Funding, Inc. that includes an US$800 million seven-year senior term loan facility.

The information agent is Laurel Hill Advisory Group Co. (877 452-7184 or assistance@laurelhill.com).

Zarlink makes mixed-signal chip technologies for communication and medical applications and is based in Ottawa. Microsemi makes semiconductors and is based in Aliso Viejo, Calif.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.