SAN JOSE, Calif., May 29, 2015 /PRNewswire/ -- Cypress
Semiconductor Corp. (NASDAQ: CY) today announced that it sent the
following letter to the Board of Directors of Integrated Silicon
Solution, Inc.
May 29, 2015
Jimmy S.M. Lee
Executive Chairman
Scott D. Howarth
President and Chief Executive Officer
Integrated Silicon Solution, Inc.
1623 Buckeye Drive
Milpitas, California 95035
Messrs. Lee and Howarth,
On behalf of Cypress Semiconductor Corporation ("Cypress"), I am
writing to formally convey our proposal to acquire 100% of the
outstanding shares of common stock of Integrated Silicon Solution,
Inc. ("ISSI") for $20.25 per share in
cash. The board of directors of Cypress has approved this
proposal. Our proposal is superior to the $20.00 per share sale price ISSI announced
earlier today.
Also attached herewith are clean and marked versions of the
draft Agreement and Plan of Merger between Cypress and ISSI (the
"Merger Agreement"). The marked version highlights the
changes we made to the draft Merger Agreement that you delivered on
May 21, 2015. We have also
enclosed a side letter (the "Side Letter") that outlines certain
commitments that Cypress is prepared to make in connection with
obtaining regulatory approvals.
Given that our proposal is financially superior, has
significantly less closing risk than the consortium's proposal
(e.g., CFIUS, Taiwan
divestitures), and has no financing risk or conditions, Cypress
asks that your board of directors immediately determine that the
terms of the attached Merger Agreement constitute a "Superior
Proposal" under the terms of the Agreement and Plan of Merger,
dated March 12, 2015, by and between
ISSI and Uphill Investment Co. (as amended, the "Uphill Merger
Agreement").
While we have invested significant time and effort in due
diligence over the past 10 days, we must express frustration as to
the slow pace at which we were given access to the data room as
well as the slow pace at which documents were posted. As we
have now been shut out of the data room, we request that our access
to the data room be restored as quickly as possible in order to
finalize our due diligence, which we expect to complete within five
days, assuming full cooperation.
Cypress's revised proposal is a "Superior Proposal" for several
reasons:
- The per share merger consideration being offered by Cypress is
$0.25 higher than the merger
consideration proposed by the consortium, leading to far greater
value for the stockholders of ISSI.
- The attached Merger Agreement does not contain any financing
conditions and includes a representation and warranty by Cypress
that it will have all the funds available as and when needed to
consummate the merger.
- As the merger positions Cypress to innovate and compete with
full service global memory chip manufacturers, this is a
pro-competitive merger between complementary companies.
Notwithstanding the pro-competitive nature of the merger, we have
taken additional steps to address any concerns as to our ability to
consummate the transaction. In an effort to put any potential
regulatory concerns to rest (even though we believe none should
exist), Cypress is willing to execute the Side Letter concurrently
with the execution of the Merger Agreement. The Side Letter commits
Cypress to license ISSI's SRAM intellectual property for up to
three years on a royalty-free basis and to offer related assistance
to any replacement supplier(s) identified by an ISSI SRAM customer or distributor. Thus, unlike
the provisions relating to the far more daunting CFIUS and
Taiwan regulatory issues in the
Uphill Merger Agreement, Cypress is not limiting its commitment to
a maximum dollar amount. Therefore, this proposal addresses any and
all regulatory concerns.
You should also note that we have deleted from the attached
Merger Agreement your suggested provision that, concurrently with
the execution of the Merger Agreement, Cypress pays to ISSI an
amount equal to $19,168,150, which
amount represents the fee payable by ISSI to Uphill Investment Co.
in connection with ISSI's termination of the Uphill Merger
Agreement. Cypress is under no obligation to pay ISSI's
termination fee and the deletion of this provision is not relevant
to the determination of whether Cypress's proposal is a "Superior
Proposal." Your payment of the termination fee will have no
effect whatsoever on the amount being paid to ISSI's stockholders
under the terms of the Merger Agreement (i.e., ISSI's stockholders
will receive the same consideration -- $20.25 per share -- regardless of whether ISSI or
Cypress pays ISSI's termination fee). Cypress accepts that it
will acquire ISSI with less cash at closing, but Cypress need not
pre-fund your obligations. As this has no impact on the value
received by your stockholders, it should have no relevance to your
evaluation of our proposal.
In light of the fact that the attached version of the Merger
Agreement clearly constitutes a "Superior Proposal" as defined in
the Uphill Merger Agreement, we believe that the ISSI board of
directors has no choice but to conclude as such, thereby triggering
ISSI's obligation to notify Uphill Investment Co. that it has come
to the determination that Cypress's proposal is a "Superior
Proposal" and to provide Uphill Investment Co. with a copy of the
attached Merger Agreement as required under Section 6.5(c)(i)(C) of
the Uphill Merger Agreement. We look forward to hearing from
you no later than 5:00 p.m. Pacific Time on Sunday, May 31, 2015
that ISSI's board of directors concurs with this assessment.
Notwithstanding anything to the contrary contained herein,
nothing in this letter constitutes a binding obligation of Cypress
to proceed with or consummate a transaction. Any transaction
between Cypress and ISSI will be subject to approval by our board
of directors and the execution by Cypress of the Merger Agreement
and other acceptable definitive agreements. As we said two weeks
ago, we would have preferred to participate in your sale process,
but were surprisingly not contacted. As such, we are
simultaneously releasing this letter and the attachments to the
public as we believe that it is in the best interest of ISSI and
its stockholders to have full information regarding our
proposal.
We look forward to working with you toward completion of a
successful transaction. If you have any questions regarding
our proposal, please contact our bankers at Greenhill & Co.
Sincerely,
T.J. Rodgers
Forward-Looking Statements
This press release contains certain "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical facts
included or incorporated herein may constitute forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding the Company's offer to acquire
ISSI, the Company's financing of the proposed transaction,
regulatory matters, and that the Company's acquisition proposal
constitutes a superior proposal under the terms of the Consortium
Merger Agreement. Statements including words such as "believes,"
"expects," "will," "look forward" or similar expressions are
forward-looking statements. Because these statements reflect
the Company's current views, expectations and beliefs concerning
future events, these forward-looking statements involve risks and
uncertainties that may affect the Company's business or future
financial results. These risks include, among others, risks
associated with the economy; conditions in the overall
semiconductor market; acceptance and demand for the Company's
products; technological and development risks; legal and regulatory
matters and other competitive factors. Risks and uncertainties
related to the proposed acquisition of ISSI include, among others,
the ultimate outcome of any possible transaction between the
Company and ISSI, including the possibilities that the Company will
not pursue a transaction with ISSI and that ISSI will reject a
transaction with the Company; the risk that if ISSI's board of
directors agrees to negotiate a definitive acquisition agreement
with the Company and the Company and ISSI enter into a definitive
agreement with respect to the proposed transaction, that ISSI's
stockholders do not approve the proposed transaction; potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed transaction;
uncertainties as to the timing of the proposed transaction;
competitive responses to the proposed transaction; the risk that
regulatory or other approvals required for the proposed transaction
are not obtained or are obtained subject to conditions that are not
anticipated; the risk that other conditions to the closing of the
proposed transaction are not satisfied; costs and difficulties
related to the closing of the proposed transaction and the
integration of ISSI's businesses and operations with Cypress's
businesses and operations; the inability to obtain or delays in
obtaining anticipated cost savings and synergies from the proposed
transaction; unexpected costs, charges or expenses resulting from
the proposed transaction; litigation relating to the proposed
transaction; the inability to retain key personnel, customers and
suppliers; and any changes in general economic and/or industry
specific conditions. Additional factors that could cause future
results or events to differ from those the Company expects are
those risks discussed under Item 1A., "Risk Factors," in Cypress's
Annual Report on Form 10-K for the fiscal year ended December 28, 2014, Cypress's Quarterly Report on
Form 10-Q for the quarter ended March 29,
2015, and other reports filed by Cypress with the Securities
and Exchange Commission. Please read the "Risk Factors" and other
cautionary statements contained in these filings. The Company
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, the occurrence
of certain events or otherwise. As a result of these risks and
others, actual results could vary significantly from those
anticipated in this press release, and Cypress' financial condition
and results of operations could be materially adversely
affected.
About Cypress
Cypress (NASDAQ: CY) delivers high-performance, high-quality
solutions at the heart of today's most advanced embedded systems,
from automotive, industrial and networking platforms to highly
interactive consumer and mobile devices. With a broad,
differentiated product portfolio that includes NOR flash memories,
F-RAM™ and SRAM, Traveo™ microcontrollers, the industry's only
PSoC® programmable system-on-chip solutions, analog and
PMIC Power Management ICs, CapSense® capacitive
touch-sensing controllers, and Wireless BLE Bluetooth®
Low-Energy and USB connectivity solutions, Cypress is committed to
providing its customers worldwide with consistent innovation,
best-in-class support and exceptional system value. To learn more,
go to www.cypress.com.
Cypress, the Cypress logo, PSoC and CapSense are registered
trademarks and F-RAM and Traveo are trademarks of Cypress
Semiconductor Corp. All other trademarks are property of their
owners.
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SOURCE Cypress Semiconductor Corp.