There will be no merger of Cadence Design Systems and Mentor Graphics after all. Cadence has withdrawn its proposal to acquire all of the outstanding shares of Mentor Graphics’ common stock. Instead, Cadence’s board of directors has authorized a $500 million increase to Cadence’s stock repurchase program.
A statement issued by Cadence read:
“Our goal in pursuing a combination of Cadence and Mentor Graphics was to create a company that would offer customers a broader and more fully integrated product and technology portfolio in a timeframe that would better enable them to address urgent and complex challenges associated with their next-generation product development. It is unfortunate for Mentor Graphics shareholders, however, that despite our best efforts, Mentor Graphics’ Board and management were unwilling to engage in substantive discussions on what we believe would have been a compelling opportunity to create significant value for both companies’ shareholders and customers.”
“Cadence is a disciplined buyer and will only pursue transactions that make sound financial sense for our shareholders. Mentor Graphics’ failure to engage in substantive discussions on our all-cash premium proposal prevented us from confirming for our financing sources the significant synergies associated with this transaction. That, along with our revised outlook and the present economic climate, led us to conclude that financing terms for the transaction are no longer attractive for our shareholders. We remain focused on executing our strategy of delivering holistic solutions that address our customers’ key challenges, while ensuring that Cadence operates in the most cost-efficient manner.”
Meanwhile, Mentor issued its own statement in response to the withdrawal of Cadence’s acquisition offer:
“Mentor Graphics acknowledged Cadence Design Systems’ press release indicating that Cadence was withdrawing their proposal to acquire Mentor Graphics. Mentor Graphics notes that this withdrawal is inconsistent with both Cadence's recent public statements and recent communications between Mentor Graphics and Cadence. Mentor Graphics was aware that, as described in the Cadence press release, Cadence was facing challenges in obtaining financing for the transaction. Additionally, today the Federal Trade Commission (FTC) made a ‘second request’ indicating that regulatory review of the previously proposed transaction would have been protracted.”
Mentor Graphics has been working diligently to enhance shareholder value and will continue these efforts.
Cadence
www.cadence.com
Mentor Graphics
www.mentor.com