Carl Icahn Offers to Buy Mentor Graphics

By Maureen O'Gara	Article Rating:
February 25, 2011 03:12 PM EST	Reads:	459

Billionaire activist shareholder Carl Icahn, who owns about 14.7% of Mentor Graphics, offered to buy the rest of the joint Tuesday for $1.91 billion, or about $17 a share, a 17% premium over its price Friday and 24% better than where it was two weeks ago when Icahn said the EDA ISV should hang out a For Sale sign.

He suggested there was a better offer in the wings from strategic bidders with "inherent synergies" that could cut Mentor's over-the-top overhead, which has been running at half of revenue.

Presumably he's thinking of Mentor rivals Cadence Design Systems and Synopsys.

His proposal, conditioned on due diligence and the company dropping its poison pills, effectively creates a bidding floor. It involves no breakup fee that would dissuade another offer.

Mentor said it would think about it.

The company was expected to meet or exceed its Q4 guidance Thursday and it came in with revenues up 30% to $307.3 million and non-GAAP ESP up 60% to 48 cents year-over-year.

Published February 25, 2011 Reads 459
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Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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