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GigaMedia Gets Buyout Offer From Management Group
Friday March 21, 7:16 am ET
NEW YORK (Dow Jones)--GigaMedia Ltd.'s board received a $1.20-a-share buyout offer for the company from a management group consisting of all seven senior officers.
The offer represents a 50% premium to GigaMedia's closing price Thursday of 80 cents on Nasdaq and values the company at $60.1 million, based on 50.1 million shares outstanding. GigaMedia's stock closed up 4 cents, or 5.3%, in Nasdaq trading.
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In a press release Friday, GigaMedia said the proposed management buyout would be implemented following a scheme of arrangement provided under Singapore law and is contingent upon certain conditions as specified in the offer letter, including the ability of the management team to secure funding.
The entertainment services provider's board has formed a special committee made up of three directors and Chairman Nelson Chang, to review the offer made by the management group.
A GigaMedia spokesman wasn't available early Friday to provide additional information about the management group and its reasons for initiating the buyout.
Earlier this month, the company cut its fourth-quarter guidance for its broadband business, citing weaker revenue and total subscriber figures. GigaMedia received a noncompliance letter from Nasdaq at the end of January after the company failed to meet the minimum bid price requirement.
Company Web site: http://www.giga.net.tw
-Lisa Reynolds; Dow Jones Newswires; 201-938-5400