VLSI turns down Philips takeover

VLSI turns down Philips takeover
David Manners The battle royal between VLSI Technology and Royal Philips Electronics continues with VLSI formally rejecting the takeover offer and saying that it wants to explore more opportunities either with Philips or any other interested party. VLSI also said that it would file with the US Securities and Exchange Commission, mail to shareholders and post on its Web site (www.vlsi.com) a statement setting out the company’s formal recommendation on the Philips offer. VLSI’s response is seen by some observers as a ploy to raise the $17 a share offer from Philips. VLSI’s shares were at $10 before the bid. Philips has two legal actions running which could scupper VLSI’s defence. One is aimed at negating VLSI’s poison pill defence, which is a clause in its Articles of Association allowing it to issue more shares, meaning that Philips would have to buy more shares to take control. The other action is a proxy fight to gain enough shareholder support to unseat VLSI’s board at its annual shareholder meeting next month. The poison pill issue should be decided next week and the proxy battle the week following.


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