China's Montage Technology to buy Pericom in $430 million deal

Reuters

(Reuters) - China's analog chip maker Montage Technology Group Ltd said it has offered to buy Pericom Semiconductor Corp in a deal valued at about $430 million, trumping an offer from Diodes Inc earlier this month.

Montage's all-cash offer of $18.50 per share is at a premium of 9.5 percent to Pericom's Tuesday close of $16.90.

Pericom shares jumped 7.3 percent to $18.14 in premarket trading on Wednesday.

Pericom makes connectivity, timing and power management chips used in cars, telecom networks and other devices.

Montage said it had received signed commitments from Bank of China and China Electronics Corp, a principal shareholder of the company, to finance the deal.

The chipmaker has also offered to pay Pericom a reverse break-up fee of 5 percent of the deal's equity value, if the transaction does not close within five business days or fails to win regulatory approval.

Montage said it would also pay a break-up fee of $15 million to Diodes on behalf of Pericom.

Earlier this month, chipmaker Diodes Inc proposed to buy Pericom in a deal valued at about $400 million to boost its analog and mixed-signal chip businesses.

Barclays is the financial adviser to Montage, while O’Melveny & Myers LLP is its legal counsel.

(Reporting By Lehar Maan in Bengaluru; Editing by Anil D'Silva)