SiliconBeat

Over the weekend at home, my wife received just about the last thing I ever expected to get from Google: A coupon in the mail. I’ve posted photos of it above. The envelope also contained a helpful brochure explaining how Google AdWords works. Pictures of that are also above.

We were both surprised and amused. Google using snail mail to send me a discount? Huh?

Here’s a couple thoughts on why I find this so odd. And I’ve submitted questions about the offer to the Google press office and will include any response I get here. Read the rest of this entry »

Zilog of San Jose is the latest chip maker to announce job cuts and salary reductions, along with a 23 percent drop in sales for its fiscal 2009 third quarter compared with the year-before quarter and a more than doubling of its net loss.

“The rapid contraction in the global economy and the clouded outlook for demand has caused us to take significant cost reduction actions that included a 35 percent reduction in our worldwide headcount and a 10 percent salary reduction for all of our North America employees along with executive staff.” said Darin Billerbeck, Zilog’s president and chief executive officer.

In August, the company reached a temporary truce with Bryant Riley, its largest shareholder,  who wanted to nominate his own director to the board and sought changes to the company’s by-laws.

Zilog, the San Jose chip company that has been fending off multiple attempts to buy it, said it reached a “settlement agreement” with dissident investor Bryant Riley whose Riley Investment Management gave notice to the company’s board July 3 that it intended to wage a proxy battle in order to gain control of on of it’s five current seats along with the an expansion of the board by one director, which Riley sought to fill. Read the rest of this entry »

Zilog’s latest suitor appears to have lost interest. A day after the San Jose chip maker set a May 30 date for its formal response to IXYS’s offer to buy the company for $4.50 a share, the Milpitas maker of power-supply semiconductors said in a filing it had lowered its stake in Zilog to below 5 percent. Read the rest of this entry »

Zilog, the San Jose chip maker that spurned advances from L.A. investor Bryant Riley back in February, received another proposal Friday, this one from a local beau. IXYS, the Milpitas maker of chips used to control energy in power supplies, proposed acquiring Zilog for $4.50 a share, payable through a combination of cash and stock. That’s nine percent higher than Zilog’s close Friday before the offer became public. Read the rest of this entry »

Zilog, the San Jose chip maker that earlier this month turned down an offer to be acquired by Universal Electronics for $4.50 a share, sent a detailed 1,800-word reply yesterday to a letter sent by “disappointed” investor Bryant Riley the week before, patiently explaining the process it used to reject the offer and to defend the compensation of its board.

The letter’s one moment of faintly perturbed tone came in the first paragraph where Zilog’s chief executive Darin Billerbeck wrote:

“We value the input of all of our stockholders; however, in this instance we are unclear whether your comments were made from your perspective as a ZiLOG stockholder, from your perspective as a potential acquiror of ZiLOG in partnership with UEI or from your perspective as UEI’s investment banker.”

Riley, whose funds own 1.1 million Zilog shares, or about 6.7 percent, entered into a “Coordination Agreement” with Universal Electronics, which was only interested in Zilog’s chip products used in remote control devices. Riley’s funds, which were to act as a “financing partner” in the deal and provide roughly half the money in proposed purchase, would acquire the other parts of Zilog’s business.

Hence Zilog’s confusion on exactly how to address the multi-hatted Riley.

Another interesting item from Zilog’s letter: once the board’s “valuation analysis” of the proposed offer was completed, a meeting that it was to have with UE to discuss the deal was canceled “just one hour before it was supposed to start,” leading Zilog to conclude that UE had “no interest in the valuation analysis of Zilog’s overall business.”

The company also defended the compensation paid to its four non-employee directors pointing out to Riley that

“While your letter notes that four non-executive members of ZiLOG’s Board had combined compensation of nearly $400,000 in fiscal year 2007, you neglect to note that over half of their compensation was derived from the Black-Scholes value of stock-options and the fair market value of stock awards and not paid in cash. The cash paid out to non-employee directors was approximately $191,000 during fiscal year 2007.”

Zilog’s also pointed out that prior to the announcement of the $4.50-per-share proposal,

“B. Riley & Co.’s own analyst had a price target for ZiLOG’s common stock at $6 per share and the other analyst covering ZiLOG had an $8 price per share target.”

Riley is the namesake of B. Riley & Co., a company he founded but in which he is “no longer involved in day-to-day operations.”

Zilog, the San Jose chip maker that earlier this month turned down an offer to be acquired by Universal Electronics for $4.50 a share, filed its quarterly report Tuesday with nary a word about the proposed deal. As we wrote in a previous post, Zilog ignored a deadline set by Universal Electronics for accepting the deal by Jan. 31, saying it couldn’t possibly respond until it had released earnings for its fiscal 2008 third quarter on Feb. 1.

Investor Bryant Riley, who holds 1.1 million shares or 6.7 percent of Zilog’s stock, is not
pleased. He sent a letter to its board on Feb. 6 saying it was “frustrated” at Zilog’s
rejection of the offer.

“We have known (Zilog) since shortly after the company emerged from bankruptcy,” wrote Riley, “and we made our first investment in the company in 2003, which we sold prior to the company raising money at $12.50 per share. Since that time we have followed the company’s performance, which has been disappointing to say the least.  We invested again in 2006 after the company hit yet another “rough patch” and the stock declined below $3.”

Riley questioned whether Zilog’s board has the “same goals” as its shareholders, “given the less than 5% insider ownership and much of such ownership was in the form of stock
options.”

He also suggested that the $500,000 worth of combined compensation that its four
non-employee directors were paid was excessive and that were it “reduced by half, it may add $.45 per share in stock value.”

So far, Riley’s tone is less chilly than the one he has used with Transmeta, a company he has offered to buy and the subject of a shareholder lawsuit he has filed. “We would welcome an open dialogue with (Zilog’s) Board members as we consider our alternatives, including nominating a new slate at the upcoming annual meeting of the stockholders.

Zilog shares closed Tuesday at $3.45. They hit a 52-week high of $6.08 in May but ended 2007 down 20 percent. The day before the offer was revealed on Jan. 18, Zilog shares closed at $2.69.

Zilog’s chief executive sent a letter to Universal Electronics (UEI), which has made an
unsolicited bid buy the maker of computer chips for toasters and automobiles for $4.50 a share on Jan. 11, telling the would-be buyer that it needs a few more days to evaluate the offer, according to an SEC filing Thursday.

The offer is being made in collaboration with Zilog’s fourth largest shareholder, the
ubiquitous (at least in Silicon Valley) Bryant Riley, who controls 1.1 million Zilog shares,
or 6.7 percent.

The take-it-or-leave-it offer was originally set to expire Jan. 21 but the deadline was extended to Jan. 29. However, even that may be too soon. “As we discussed on the phone we are carefully evaluating your proposal with the assistance of our financial and legal advisors,” wrote Darin Billerbeck to Universal Electronics CEO Paul Arling. “We do not anticipate being in a position to respond to your offer prior to February 1, 2008. Unless we hear otherwise from you, we will assume that your offer will continue in full force and effect until 5 P.M.” that day.

Shares of Zilog, which has had multiple lives as a public company, hit a 52-week high of $6.08 in May but ended the year down 20 percent. The day before the offer was revealed on Jan. 18, Zilog shares closed at $2.69. They rose 61 cents, or 23 percent, on the news to $3.30 and closed at $3.83 today.

That’s a 67 cent per-share profit for the arbitrage bettors among you, should the deal go through.