Philips agrees to put VLSI on hold

Philips agrees to put VLSI on hold
David Manners A temporary cease-fire in the Philips/VLSI hostilities has been announced with both sides taking a break until May 10. Philips, which now owns 1.23 million VLSI shares, representing 2.7 per cent of VLSI’s equity, has agreed not to buy any more shares until May 10 without the approval of VLSI’s board. Philips has also agreed to suspend until then its efforts to solicit votes to remove the VLSI board and to replace it with its own nominees In return, VLSI has agreed to provide Philips with ‘prompt access’ to non-public information and with access to senior VLSI management so that Philips can carry out the ‘due diligence’ investigations needed before a takeover. Meanwhile, VLSI has agreed that if it asks any other company for a ‘formal proposal’ of takeover terms, it will also ask Philips for a formal proposal. The whole agreement lapses if VLSI signs a strategic agreement with any other company, or if any company other than Philips makes an offer for VLSI and the VLSI board does not recommend its rejection.


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