Mentor Graphics Rebuffs Icahn’s Purchase Offer
The company wants to be left to follow its existing strategic plan
By: Maureen O'Gara
Mar. 29, 2011 11:00 AM
Mentor Graphics' board Monday unanimously rejected Carl Icahn's month-old offer to buy the joint for $1.9 billion, which translates into $17 a share. It says it's too little.
It also said that "Icahn's proposal that Mentor put itself up for sale to a strategic buyer entails significant commercial and regulatory risk and is therefore not in the best interest of the company and Mentor's shareholders."
It said it updated its analysis of a combination with Cadence or Synopsis and not only are there regulatory hurdles but it figures any attempt would destabilize its customer base and its workforce if such discussions started and weren't consummated.
The company wants to be left to follow its existing strategic plan. Although the board "confirmed that it remains open to any opportunity to enhance shareholder value," it figures now's not the time to put the company up for sale.
Goldman Sachs is advising it.
The decision pushed the company's stock price up a few cents to $15.28 near the end of the trading day Monday.
Icahn, who's critical of Mentor Graphics' management, currently owns close to 15% of the company and has threatened to put his own people on the board. A Mentor poison pill would be activated by any attempt to buy more than 15% of the company.
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