Spreadtrum Board Accepts Buyout Offer
ThinkstockFabless semiconductor firm Spreadtrum Communications Inc. (NASDAQ: SPRD) and China’s Tsinghua Unigroup announced today that the two companies have agreed to a merger under which Tsinghua will pay $31 per American depositary share (ADS) for Spreadtrum. The deal is worth…
Fabless semiconductor firm Spreadtrum Communications Inc. (NASDAQ: SPRD) and China’s Tsinghua Unigroup announced today that the two companies have agreed to a merger under which Tsinghua will pay $31 per American depositary share (ADS) for Spreadtrum. The deal is worth a total of $1.78 billion. Spreadtrum shareholders must approve the deal, and it is subject to regulatory approvals as well.
Tsinghua first offered $28.50 per ADS for the maker of wireless communications chips in late June. That sent Spreadtrum’s ADS to a 52-week high of $26.69, and the shares have traded at about that level ever since. The shares posted an all-time high of around $29 in November 2011.
Spreadtrum, which is based in China, is a developer of mobile chipsets for smartphones and other mobile devices. The company has supplier agreements with China Mobile Ltd. (NYSE: CHL), the world’s largest wireless company, European telecom giant Orange, and Facebook Inc. (NASDAQ: FB).
Tsinghua said there are no financing conditions to its offer. In its original offer in June Tsinghua said the all-cash offer may be financed by a combination of equity and debt. Today’s announcement does not indicate a closing date for the transaction.
Shares are trading at $30.18 in the premarket this morning, up 14%, and above the 52-week range of $14.50 to $26.69.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.