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17 November 2014

GigOptix withdraws proposal to acquire GSI

GigOptix Inc of San Jose, CA, USA (a fabless supplier of analog semiconductor and optical communications components for fiber-optic and wireless networks) has withdrawn its previous offer to acquire GSI Technology Inc of Sunnyvale, CA, USA - a provider of static random access memory (SRAM) products primarily incorporated in networking and telecoms equipment - for per-share consideration of $6.50, consisting of (i) $2.00 per share in cash, (ii) GigOptix common stock worth $1.33 (based on the volume-weighted average price of GigOptix’ common stock for the three trading days ending one day prior to the closing of the combination) and (iii) a special dividend of $3.17 per share in cash payable by GSI.

“We were disappointed that, despite the fact that (i) our offer was in an amount equal in value per share to the price paid by GSI Technology in its recently completed Dutch auction tender offer, (ii) was at a substantial premium to GSI Technology’s share price, (iii) offered, as we believe, a meaningful path to resolve the expensive litigations of GSI Technology, and (iv) represented, in our opinion, a compelling opportunity for its stockholders altogether (a number of whom tendered shares in the Dutch auction tender offer that were not repurchased), our offer was dismissed without giving us the opportunity to discuss its merits directly with their board,” comments GigOptix’s chairman & CEO Dr Avi Katz. “Given the implementation by the GSI Technology board of directors, subsequent to our proposal, of an executive retention and severance plan which would result in members of the management of GSI Technology potentially receiving substantial cash payments in the event of an acquisition, and the continued reluctance of GSI Technology’s board of directors to engage in substantive discussions with us despite GSI Technology’s continued lackluster performance in the most recent quarter and public statements and what we believe is other outreach to GSI Technology by some of their stockholders following their most recent earnings announcement encouraging such engagement, we have now formally withdrawn our proposal to acquire all of the shares of GSI,” he adds.

GigOptix first proposed the acquisition in a letter to GSI’s board on 19 August. The firm says that it has reiterated this proposal on several occasions during the intervening three-month period, stating that it continued to seek a negotiated agreement with GSI, and would continue to explore all necessary steps to ensure that GSI’s stockholders were provided with the opportunity to realize the value inherent in the proposal.

“It has been our sincere hope that we would be able to explore together a friendly combination of our two companies that would provide premium value to GSI Technology’s stockholders and benefit its customers, representatives and associates around the world,” says Katz. “We have not asked the GSI Technology board of directors to accept our proposed purchase price or to agree to sell GSI Technology, but only to sit down and discuss whether there might be a common basis for pursuing a transaction that we believe would be beneficial to all parties, including the stockholders of both companies. We are surprised by the unwillingness of the GSI Technology board of directors to do so,” he adds. “If in the future we are asked by GSI Technology or by its major stockholders to engage in discussions with GSI Technology, we will consider any changed circumstances involving GSI Technology, operational or economic, in determining whether to so engage, and on what terms we would be willing to do so.”

See related items:

GSI rejects proposed acquisition by GigOptix

GigOptix proposes to acquire memory product firm GSI for $161m

Tags: GigOptix

Visit: www.gsitechnology.com

Visit: www.gigoptix.com

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