Ramtron - FRAM - ESRAM (RMTR)

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Cypress Makes Hostile $2.48/Shr Bid For Ramtron International

http://www.forbes.com/sites/ericsavitz/2012/06/12/cypress-makes-hostile-2-48shr-bid-for-ramtron-international/

Cypress Semiconductor this morning said it has offered to acquire the chip company Ramtron International for $2.48 a share, in a rare example of a hostile, unsolicited takeover bid.

Cypress noted that the offer comes at a 37% premium to yesterday’s closing price of $1.81.

“We believe that our offer provides compelling value to Ramtron’s stockholders,” Cypress CEO T.J. Rodgers said in a statement. “Last year, we attempted to negotiate an acquisition of Ramtron, but our offer of $3.01 per share – which represented the same 37% premium to Ramtron’s then-current stock price as we are offering today – was summarily rejected. Soon thereafter, Ramtron sold almost 20% of its stock in a dilutive public offering at a net price of $1.79 per share.”

Rogers says he now calls on Ramtrom’s board “to act in the best interests of its stockholders by meeting with us to seriously discuss our compelling proposal. We believe that Cypress would benefit Ramtron’s customers, providing them with a more stable source of supply, greater research and development resources and better support from a much larger sales channel. We also believe the combination would provide Ramtron’s employees with more opportunity for long-term success as part of a larger, more global organization.”

Cypress included in its press release a letter the company sent to Ramtron’s board.

“
Gentlemen:

I am writing to formally convey Cypress Semiconductor’s proposal to acquire Ramtron International Corporation for $2.48 per share in cash. This represents a premium of 37% over Ramtron’s closing price of $1.81 per share on June 11, 2012. We believe that this all-cash transaction, which has been unanimously approved by our Board of Directors, is compelling for Ramtron and its stockholders. Our proposal would deliver immediate, certain value to Ramtron’s stockholders that is far superior to what we believe that you can reasonably expect to achieve as a standalone company.

We believe that an acquisition can be completed expeditiously and are prepared to commence a cash tender offer with no financing or due diligence conditions. We have retained Greenhill & Co., LLC as our financial advisor and Wilson Sonsini Goodrich & Rosati, Professional Corporation, as our legal counsel. We are confident that a transaction would receive all necessary regulatory approvals, including antitrust clearances.

We hope to work with you on a negotiated basis to complete this transaction successfully, and are prepared to deliver a draft merger agreement and begin discussions immediately. I suggest that our respective financial and legal advisors meet at your earliest convenience to work toward the goal of announcement of a definitive agreement in the very near future.

It has been about two years since I first approached you about a possible transaction between our two companies and over a year since we delivered a formal proposal to acquire Ramtron. As you will recall, that proposal (at $3.01 per share) was for a 37% premium over your then-current stock price on March 8, 2011—the same premium we are offering today. Our offer made clear that we were prepared to commence due diligence immediately and would deliver a merger agreement with minimal closing conditions. We were deeply disappointed when, two weeks after we provided you with our offer, you and your Board of Directors responded that our offer was so low that it was not even worth your time to make a counter proposal.

Since then, a number of events have convinced us that your response did not reflect the best interests of your stockholders. First, soon after you rejected our offer, Ramtron sold almost 20% of its stock in a dilutive public offering at a net price of $1.79 per share, which I found extremely surprising in light of your comments regarding our offer and its 68% premium to that price. Second, since our offer Ramtron has had cumulative net losses of five cents per share. Third, your stockholders have been increasingly vocal about their desire for you to sell Ramtron. These factors, along with your history of rejecting out-of-hand our prior offer, have convinced us that we must make our offer public at this time so that your stockholders are aware of our efforts. I have attached copies of my prior letters to you to this letter.

Although we would prefer to proceed through a negotiated agreement, we are fully committed to this transaction, and will take the steps necessary to complete it. We believe that a transaction between our two companies would be well received by your stockholders, and we are committed to providing them with an opportunity to express their views on our proposal.

This letter does not represent or create any legally binding or enforceable obligations. No such obligations will be imposed on either party unless and until a definitive agreement is signed by both Cypress and Ramtron.

We request a response to our proposal by 5:00 p.m. Pacific Daylight Time on Tuesday, June 19, 2012. In light of the significance of this proposal to your stockholders and ours, as well as the potential for selective disclosure, we are publicly releasing the text of this letter.

Very truly yours,

T.J. Rodgers
President and Chief Executive Officer.

The release also includes copies of letters Rodgers sent to Ramtrom in March and April of 2011. In one of those letters, dated April 11, 2011, in which Cypress withdrew its original offer, Rodgers points out that Ramtron’s stock price had appreciated while the two companies were in negotiations that had not been publicly disclosed.

“On another topic, I have enclosed a chart of Ramtron’s share price on which I have marked the dates of my acquisition proposal letter and your response to it,” he wrote. “As you can see, there was a significant rise in Ramtron’s price after those events. While no one can say what drives the market up or down – and I am not trying to imply anything here – you might want to take a look at the security measures that were employed by Ramtron regarding this proposed transaction.”

RMTR this morning is up 59 cents, or 32.6%, to $2.40.