Chipmaker VLSI Technology Inc said Friday that its board has outright rejected the unsolicited takeover bid from Philips Electronics NV. The company’s board voted unanimously against the $17 per share offer, judging it inadequate and not in the best interests of its stockholders, and has recommended that holders not tender their shares to Philips. The board has decided that the company should explore strategic alternatives, including a merger or sale to a different suitor or re-capitalization of the company. It will continue to engage in discussions with possible partners, it says, and hasn’t ruled out negotiations with Philips itself on a new deal.
Philips went public with its $778m offer for VLSI on February 25 – which then represented a 58% premium over the share price – and took it directly to the shareholders just a week later, when it appeared that VLSI was dragging its feet. Earlier last week, Philips had made moves to oust VLSI’s board by filing a consent solicitation with the Securities and Exchange Commission which would allow VLSI’s shareholders to vote the current board out and replace them with candidates put forward by Philips. VLSI shares closed at $19.50 Friday, up $0.5625. á
