VLSI asks shareholders to reject Philips offer

VLSI asks shareholders to reject Philips offer
Tom Foremski
VLSI Technology has asked its shareholders to reject a tender offer being made by Dutch firm Philips Electronics as it fights off the hostile bid.
In a concession to Philips, VLSI has told its shareholders that its board of directors will make a recommendation on whether the Philips offer should be accepted by March 18. It had earlier said that its board of directors would meet on March 23 to decide on the offer.
Philips, however, is unwilling to wait for VLSI’s board of directors to make a decision, fearing that the purchase price could rise if other companies come in and a bidding war results. Philips has also filed a lawsuit against VLSI seeking the removal of provisions that discourage a takeover of the firm.
VLSI’s share price has increased to more than $18 per share, higher than Philips’ $17 offer as shareholders expect a higher bid.

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