Universal Electronics Inc.’s bid to buy San Jose-based chipmaker Zilog Inc. was rejected Monday after Zilog’s board turned down the unsolicited offer.
Cypress-based Universal Electronics, which makes remote controls for home electronics, initially sent a letter to Zilog’s chairman with details of the buyout offer in mid-January.
Universal Electronics, which had a recent market value of about $340 million, was set to offer $4.50 a share for Zilog, or about $76 million.
That’s about 70% more than what Zilog’s shares closed at the day before the offer was made.
Zilog, which got its start in 1974, said in a statement that the offer “did not adequately reflect Zilog’s strategic value or the potential future value enhancements associated with the company’s new growth strategy.”
“The decision by the board reflects the confidence of the management and the board about the company’s future prospects,” Zilog Chief Executive Darin Billerbeck said. “The board concluded that the UEI proposal is not in the best interests of Zilog’s shareholders.”
Wall Street didn’t seem too keen on the rejection,investors hammered Zilog’s stock in mid-day New York trading Monday.
Shares were down nearly 10% on a recent market value of about $55 million.
