SiliconBeat

In a letter that began “Dear Wally”, Cadence Design Chief Executive Michael Fister explained to Walden Rhines, his counterpart at Mentor Graphics, why he was forced to go public with their offer to buy Mentor two months after the wooing began, so far to no avail.

The dating began on April 16, when, “As you will recall, you and I first spoke about combining” the two companies. That was followed by a meeting between the CEOs on May 2 when Cadence presented its proposal.

Following that meeting, “we repeatedly attempted to bring the Cadence and Mentor Graphics
leadership teams together to discuss our proposal.” On May 23, Fister wrote, “you informed
us that, even without any substantive discussion with us or negotiation of our proposal,
Mentor Graphics concluded that it did not wish to pursue discussions with us given Mentor
Graphics’ desire to stay independent.”

“This proposal is a full and fair price and provides an attractive opportunity for your
shareholders to realize, with certainty, significant value for their investment in Mentor
Graphics,” Fister went on, saying the price “represents a 30% premium over the closing price
of Mentor Graphics common stock on … the last trading day prior to public disclosure of our
proposal, a 59% premium over the closing price of Mentor Graphics common stock on May 2, when
we presented the terms of our proposal, and a 46% premium over Mentor Graphics’ average
closing price for the past 30 trading days.”

Fister’s letter to “Wally” was not exactly sealed with a kiss: “Sincerely Yours, Michael J. Fister” Um, was the middle initial absolutely necessary?

Mentor’s response today in a press release, which called the price “insufficient”, hinged largely on an argument that Uncle Sam would not approve of the union: “the risks of not gaining regulatory approval were sufficiently high that the ability of the parties to consummate the transaction would be in
jeopardy.”