Robbins: Acquisition of Silicon Image, Inc. (SIMG) by Lattice Semiconductor Corporation (LSCC) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Silicon Image, Inc. (NASDAQ: SIMG) by Lattice Semiconductor Corporation (NASDAQGS: LSCC). On January 27, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Lattice Semiconductor will acquire Silicon Image in an all-cash tender offer of $7.30 for each share of Silicon Image common stock.
Is the Proposed Acquisition Best for Silicon Image and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Silicon Image is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $7.30 merger consideration represents a premium of only 23.7% based on Silicon Image’s closing price on January 26, 2015. This premium is significantly below the average one-day premium of nearly 43.6% for comparable transactions within the past three years. Further, the $7.30 merger consideration is below the target price of $8.00 set by an analyst at Sidoti & Company LLC on January 6, 2015. Moreover, Silicon Image traded above the offer price as recently as December 9, 2014, closing at $7.32.
On October 30, 2014, Silicon Image released its earnings results for its third quarter 2014, reporting strong quarterly earnings. For the quarter, the company reported revenue of $70.3 million, compared with $59.5 million in the second quarter of 2014, an increase of 18.2%. Silicon Image also reported GAAP net income for the third quarter of 2014 of $10.3 million, compared with $1.1 million for the second quarter of 2014, and $9.0 million for the third quarter of 2013. Additionally, Silicon Image beat consensus analyst estimates for adjusted EPS and adjusted net income in three out of its past four quarters. In commenting on these results, Silicon Image Chief Executive Officer Camillo Martino remarked, “In the quarter, we saw continued strength in our CE business with year-to-date performance up 38 percent over the same period last year. Today we are also announcing plans to create two new subsidiaries to help unlock the value of some of our core assets.”
In light of these facts, Robbins LLP is examining Silicon Image board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Silicon Image shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Silicon Image shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.