After scoffing at $5-per-share bid last year, Atmel seeks options exchange
Atmel CEO Steve Laub told employees of the San Jose chip maker that its board has agreed to ask shareholders to approve a “one-time” stock option exchange program at its annual meeting scheduled for May 20 that would commence sometime within 12 months following the vote.
“(L)ike many other companies in the technology industry, (Atmel) has recently experienced a substantial decline in its stock price,” the board explains in its proposal for the exchange. The company cites in its proxy the same forces named by other companies that have initiated option exchanges: the drop in global demand for chips along with the industry’s excess manufacturing capacity.
However, in the interests of full disclosure, the company adds that “stockholders should be aware that in fall 2008 an unsolicited joint proposal to acquire the Company was made by two of our competitors, which was subsequently withdrawn. One of those competitors later announced its intention to elect a board slate at Atmel’s 2009 Annual Meeting of Stockholders, and subsequently withdrew its slate of directors and terminated its consideration of a potential transaction with Atmel.”
In October, Atmel’s board turned down an unsolicited proposal from Microchip Technology and ON Semiconductor to buy it for $5 a share, saying at the time the offer was “inadequate in multiple respects, including value, conditionality and complexity, and is not in the best interests of Atmel’s stockholders.”
Since then, Atmel’s shares have traded at an average of $3.49 and as low as $2.54.
Details of the exchange have yet to be devised, including whether or not the old options were to be replaced by a lesser number of new options or restricted stock, the method preferred by Zoran, another local chip company that also announced an options exchange proposal today.
