eastunder
12 years ago
Ramtron Reports Second Quarter 2012 Financial Results
Ramtron International Corp. (MM) (NASDAQ:RMTR)
Intraday Stock Chart
Today : Tuesday 24 July 2012
U.S. semiconductor maker Ramtron International Corporation (Nasdaq: RMTR), a leading developer and supplier of ferroelectric-based memory and integrated semiconductor products, today reported total revenue of $14.2 million for the second quarter of 2012, compared to $16.8 million for the second quarter of 2011. Net income for the second quarter of 2012 was $69,000, or $0.00 per share, compared with a net loss of $683,000, or ($0.02) per share, for the second quarter of 2011.
“Distributor order flow began to slow as headwinds in the semiconductor markets that we serve picked up toward the end of the second quarter and stalled our revenue growth,” said Eric Balzer, Ramtron’s chief executive officer. “Despite this industry softness, we posted Adjusted EBITDA of $1.9 million by maintaining operational discipline and reduced inventory by approximately $1.4 million on a sequential basis.
“In addition, we gained traction with our demand creation initiatives during the quarter, logging new wins and advancing opportunities in automotive, metering and medical applications,” Balzer continued. “We are now seven months into our program of driving design wins with new and existing customers after last year’s hiatus in design activity, when our highest priority was to work with our existing customers to manage supply constraints. With a number of new design wins under our belt and emerging opportunities on the horizon, we remain well positioned for growth in 2013 and beyond.”
2012 Second-Quarter Financial Highlights
• Total revenue of $14.2 million, compared to $14.9 million in the first quarter of 2012
• Product gross margin remained flat at 52%, compared to first quarter of 2012
• Income tax provision was $167,000
• Stock-based compensation was $368,000
• Adjusted EBITDA was approximately $1.9 million
2012 Second-Quarter Corporate and Product Highlights
• Ramtron was added to NVIDIA’s Preferred Vendor List and participated in the GPU Technology Conference 2012 in San Jose, CA.
• Named Gery E. Richards as chief financial officer. Mr. Richards joined Ramtron in 2004, became controller in 2008, and was appointed interim chief financial officer in October 2011.
• Appointed Erik Wood as director of business development. Mr. Wood brings to Ramtron 17 years of solution sales and high-tech market development experience with deep experience in the defense/aerospace, supply chain, transportation, oil and gas, healthcare, identification and security markets.
• Announced availability of the MaxReader Development Kit to enhance the adoption of the Company’s wireless memory products. The Kit allows system designers to quickly evaluate, thoroughly test, and rapidly prototype Ramtron’s MaxArias™ wireless memory for a broad range of RF-enabled applications.
“Limited near-term visibility, brought on by weak industry conditions, has caused us to become more conservative on our outlook for 2012,” Balzer added. “As a result, we are operating under the assumption that revenue stays flat for the third-quarter of 2012. At this level, we are confident that we will maintain positive cash flow from operating activities. While managing the business for cash flow, we are intensely focused on driving growth through the execution of our demand creation initiatives, expanding design activity, and introducing new products so that we are prepared for an improvement in industry conditions and, longer term, to take advantage of the significant opportunities for our F-RAM based low energy, wireless, and high data integrity solutions,” Balzer concluded.
Business Outlook
In light of limited near-term visibility, Ramtron is modifying its guidance policy from providing an outlook for full-year 2012 to an outlook for the next reported quarter. As visibility and industry conditions improve, Ramtron’s management will re-evaluate its guidance policy.
The following statements are based on Ramtron’s current expectations of results for the third quarter of 2012. These statements are forward looking, and actual results may differ materially from those set forth in these statements. Ramtron intends to continue its policy of not updating forward-looking statements other than in publicly available documents, even if experience or future changes show that anticipated results or events will not be realized.
For Q3 2012:
• Management expects revenue of approximately $14.0 to $14.5 million with a gross product margin of 52%.
• In terms of operating expenses, by expense line item and as a percent of total revenue, management expects sales and marketing to be 18%, research and development to be 22%, and general and administrative to be 16%. Included in general and administrative expenses are expected fees and expenses, totaling approximately 5% of total revenue, associated with the tender offer commenced by Cypress Semiconductor Corporation.
Strategic Alternatives Review Process
Ramtron’s Board of Directors is continuing to evaluate strategic alternatives including, but not limited to, a potential sale of the Company, a strategic alignment with one or more investors or joint venture counterparties, other potential strategic transactions to realize the long-term value of the Company for its stockholders, or continuing with the Company’s current growth plans. The Board continues to believe that completing the strategic review process is one way to ensure that Ramtron stockholders have the best opportunity to realize a full and fair value for their investment. No assurance can be given as to whether this process will result in a proposed transaction, whether any transaction that may be proposed as a result of such process would be acceptable to the Company and the Board or whether any such proposed transaction will be announced or consummated.
Conference Call
Management will conduct a conference call to discuss second quarter results today at 5:00 PM Eastern Time/4:00 PM Central Time. To participate in the conference call, please call (888) 771-4371 or (847) 585-4405 and reference code # 32838497. The call will also be webcast. To access the webcast, investors should go to the home page of the Ramtron site at www.ramtron.com and click on the teleconference link. From this site, investors can access the teleconference webcast. A properly configured computer system is required.
A replay of the live conference call will be available from 7:30 PM Eastern Time/6:30 PM Central time on July 24 until 11:59 PM Eastern time/10:59 PM Central Time on July 30. To listen to the replay, please dial (888) 843-7419, passcode #32838497. In addition, a replay of the webcast will be available shortly after the call at http://www.ramtron.com/investor-relations/calendar-events/ and will be archived for one year.
eastunder
12 years ago
Background of the Offer
http://www.sec.gov/Archives/edgar/data/849502/000119312512294140/d376233dsc14d9.htm
On January 28, 2011,
T.J. Rodgers, President and Chief Executive Officer of Cypress, and Dana C. Nazarian, Executive Vice President of the Memory Products Division of Cypress, met with Dr. William L. George, a member of the Board, and Jack L. Saltich, who was then a member of the Board of Ramtron. During the meeting, the potential synergies between a business combination of Ramtron and Cypress were discussed.
On March 8, 2011,
Eric A. Balzer, the Chief Executive Officer of Ramtron received the following letter from Mr. Rodgers:
March 8, 2011
Dear Mr. Balzer:
The purpose of this letter is to propose the acquisition of Ramtron International Corporation by Cypress Semiconductor Corporation for $3.01 per share in cash, a 37% premium over Ramtron’s closing price of $2.20 on March 8, 2011 and a 32% premium over Ramtron’s 15-day, volume-weighted trading price of $2.28. This premium exceeds the 30% premium reported in comparable transactions in 2011 — and is 2.4 times higher than the premium paid by Microchip Technology, Inc. in its acquisition of Silicon Storage Technology, Inc. in a 2010 transaction which is very similar to this proposed transaction. We have the cash on hand to complete this transaction in an expeditious manner.
We believe the transaction would be favorable not only to Ramtron’s shareholders, but also — and particularly — to Ramtron’s customers. Relative to Ramtron alone, the combined company would serve its customers with 1) a more stable source of supply, consisting of two non-volatile technologies from five wafer-fabrication plants (three from Cypress), 2) a lower manufacturing cost structure due to Cypress’s low wafer and assembly & test manufacturing costs, 3) shorter leadtimes due to our internal 45-day fab cycle time and 7-day assembly & test cycle times, 4) access to high density and higher performance products fabricated in Cypress’s advanced non-volatile technologies, 0.13-micron (in production in three fabs) and 0.65-micron (in production at UMC), 5) better support from Cypress’s 400-person Sales, Marketing and Field Applications Marketing teams, and 6) the lower overhead costs that would result from combining our Colorado Springs and other overhead operations.
In particular, we believe that as a combined company, we could bring immediate relief to Ramtron’s customers by rationing the scarce supply of FeRAMs to those customers who specifically need that technology, while immediately serving the needs of the rest of Ramtron’s other customers with Cypress’s high-quality, high-reliability, pin-compatible products, manufactured in our SONOS technology.
We would like to enter into a more substantial conversation with Ramtron regarding the details of this offer on an expedited schedule, so as to address the current market supply problem as quickly as possible. Of course, we will take the time to negotiate thoroughly and in good faith. We plan to make this offer public at the close of business on March 15, 2011.
Sincerely,
T.J. Rodgers
President & CEO
On March 9, 2011,
Dr. William G. Howard, Jr. the Chairman of the Board, telephoned Mr. Rodgers to discuss Mr. Rodgers’s March 8, 2011 letter to Ramtron. During this conversation, Mr. Rodgers and Dr. Howard discussed, among other things, Cypress’s anticipated timing for its proposed transaction and the timing of Ramtron’s consideration of the proposal.
On March 10, 2011,
Mr. Rodgers sent the following letter to Ramtron:
March 10, 2011
Dear Mr. Balzer:
This letter documents the comments I made to you in our telephone conversation yesterday.
Here is the supplemental information that I provided:
• Cypress anticipates that there will be minimal due diligence (two weeks or less) required for a Ramtron-Cypress merger.
• We are prepared to sign a confidentiality agreement immediately as a condition of commencing due diligence.
• Cypress has studied the Hart-Scott-Rodino process and anticipates no regulatory problems.
• Cypress intends to accelerate all employee options and buy them out.
• Cypress is prepared to deliver a definitive merger agreement with minimal closing conditions and a fiduciary-duty out-clause for a superior proposal (subject to a reasonable breakup fee and Cypress’s right to match that superior offer).
• Cypress will work cooperatively with Ramtron to create a win-win deal for both companies.
Sincerely,
T.J. Rodgers
President & CEO
On March 11, 2011,
the Board convened a telephonic meeting to further discuss Cypress’s March 8 proposal. The Board approved the establishment of a Strategic Transaction Committee (the “2011 Committee”), which committee consisted of Dr. Howard, Mr. Balzer, Eric Kuo and Theodore J. Coburn, to assist the Board in considering any acquisition proposals from Cypress and any transactions that may be considered as alternatives to Cypress’s indication of interest. Also at this meeting the Board authorized the retention of Shearman & Sterling LLP (“Shearman & Sterling”), as the Company’s special legal counsel, and Needham & Company, LLC (“Needham & Company”), as the Company’s financial advisor.
On March 12, 2011,
at a telephonic meeting of the 2011 Committee, representatives of Shearman & Sterling reviewed with the 2011 Committee its fiduciary duties and various process-related issues and considerations that arise in connection with the evaluation of, and response to, an unsolicited acquisition proposal. Representatives of Needham & Company then reviewed with the 2011 Committee certain preliminary financial analyses and data regarding the Company and various process considerations. Representatives of Shearman & Sterling and Needham addressed various questions and topics of discussion raised by the 2011 Committee related to Cypress’s proposal and the exploration of strategic alternatives.
On March 13, 2011,
the 2011 Committee held a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present. Representatives of Shearman & Sterling provided an overview of certain provisions in the Company’s bylaws. Representatives of Needham & Company presented a summary of the work to be undertaken by Needham & Company in connection with evaluating the March 8 proposal.
On March 14, 2011,
the 2011 Committee held a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present. Dr. Howard provided an overview of the conversation he had with Mr. Rodgers on March 9, 2011. Representatives of Shearman & Sterling again discussed certain provisions of the Company’s bylaws. The 2011 Committee also reviewed certain communications materials.
On March 20, 2011,
the 2011 Committee held two telephonic meetings, at which management and representatives of Shearman & Sterling and Needham & Company were present. Mr. Balzer summarized certain conversations with a customer of the Company and the impact a transaction with Cypress would have on that customer relationship. Representatives of Needham & Company then provided the 2011 Committee with an overview of their preliminary financial analyses, and received feedback from the Company’s management and the 2011 Committee on those analyses. After discussion, and taking into account the analyses prepared by Needham & Company, the 2011 Committee determined that Cypress’s March 8 proposal was not in the best interest of the Company’s stockholders.
On March 21, 2011,
Dr. Howard advised Mr. Rodgers by telephone that the 2011 Committee determined that Cypress’s proposal to acquire Ramtron was not in the best interest of the Company’s stockholders.
Following their call, Dr. Howard sent the following letter to Mr. Rodgers:
March 22, 2011
Dear Mr. Rodgers:
It was a pleasure speaking with you by phone yesterday. I thought it would be appropriate to formally respond to your letter dated March 8, 2011, outlining a proposal to acquire Ramtron for $3.01 per share in cash.
As we discussed yesterday, our Board established a strategic transaction committee with full authority to evaluate your proposal and related issues. The committee met numerous times in the last two weeks and carefully and thoroughly reviewed the contents of your proposal with the assistance of independent financial and legal advisors selected by the committee. Based on this evaluation, our Board has concluded that your proposal is not in the best interests of Ramtron stockholders.
On behalf of the Board of Directors, I thank you for your interest in Ramtron.
Sincerely,
Dr. William G. Howard
Chairman of the Board of Directors
On April 11, 2011,
Mr. Rodgers sent the following letter to Dr. Howard reiterating Cypress’s belief that the acquisition proposal in Cypress’s March 8, 2011 letter would be attractive to Ramtron’s stockholders:
April 11, 2011
Dear Bill:
I’m writing this letter to close the loop on our recent M&A discussions. On March 8, 2011, after a lot of careful deliberation, Cypress made an offer of acquisition to Ramtron with an embedded 37% premium to market. We felt — and still feel — that our offer would be attractive to your shareholders.
What we heard from you telephonically and in a letter dated March 22, 2011, was that you felt the offer was too low — so low, in fact, that it was not worth your while to make a counter proposal.
Although we do not agree with that position, we accept it and are officially withdrawing our offer to acquire Ramtron at this time. Please let me know if you would reconsider your position.
On another topic, I have enclosed a chart of Ramtron’s share price on which I have marked the dates of my acquisition proposal letter and your response to it. As you can see, there was a significant rise in Ramtron’s price after those events. While no one can say what drives the market up or down — and I am not trying to imply anything here — you might want to take a look at the security measures that were employed by Ramtron regarding this proposed transaction.
Sincerely yours,
T.J. Rodgers
President & CEO
The following chart was attached to the letter that Mr. Rodgers sent to Dr. Howard on April 11, 2011:
On July 19, 2011, August 12, 2011, October 5, 2011, December 6, 2011 and February 13, 2012,
the Compensation Committee of the Board held meetings at which it discussed, among other matters, entering into Change in Control Severance Agreements, or amendments thereto, with certain members of the Company’s management. From mid-2011 until June 2012, Dr. George, chairman of the Compensation Committee, investigated the current best practices for peer companies in regard to such agreements, instructed the Company’s counsel to prepare drafts of such agreements, or amendments thereto, for review by the Compensation Committee of the Board, and engaged in discussions and negotiations of such agreements, or amendments thereto, with certain members of the Company’s management. The terms of such agreements, or amendments thereto, were further discussed in a meeting of the Board on June 6, 2012. Drafts of such agreements, or amendments thereto, were thereafter finalized for review and expected approval by the Board and the Compensation Committee for meetings scheduled for July 2012.
On June 12, 2012,
Mr. Rodgers sent the following letter to Dr. Howard and Mr. Balzer:
June 12, 2012
Gentlemen:
I am writing to formally convey Cypress Semiconductor’s proposal to acquire Ramtron International Corporation for $2.48 per share in cash. This represents a premium of 37% over Ramtron’s closing price of $1.81 per share on June 11, 2012. We believe that this all-cash transaction, which has been unanimously approved by our Board of Directors, is compelling for Ramtron and its stockholders. Our proposal would deliver immediate, certain value to Ramtron’s stockholders that is far superior to what we believe that you can reasonably expect to achieve as a standalone company.
We believe that an acquisition can be completed expeditiously and are prepared to commence a cash tender offer with no financing or due diligence conditions. We have retained Greenhill & Co., LLC as our financial advisor and Wilson Sonsini Goodrich & Rosati, Professional Corporation, as our legal counsel. We are confident that a transaction would receive all necessary regulatory approvals, including antitrust clearances.
We hope to work with you on a negotiated basis to complete this transaction successfully, and are prepared to deliver a draft merger agreement and begin discussions immediately. I suggest that our respective financial and legal advisors meet at your earliest convenience to work toward the goal of announcement of a definitive agreement in the very near future.
It has been about two years since I first approached you about a possible transaction between our two companies and over a year since we delivered a formal proposal to acquire Ramtron. As you will recall, that proposal (at $3.01 per share) was for a 37% premium over your then-current stock price on March 8, 2011 — the same premium we are offering today. Our offer made clear that we were prepared to commence due diligence immediately and would deliver a merger agreement with minimal closing conditions. We were deeply disappointed when, two weeks after we provided you with our offer, you and your Board of Directors responded that our offer was so low that it was not even worth your time to make a counter proposal.
Since then, a number of events have convinced us that your response did not reflect the best interests of your stockholders. First, soon after you rejected our offer, Ramtron sold almost 20% of its stock in a dilutive public offering at a net price of $1.79 per share, which I found extremely surprising in light of your comments regarding our offer and its 68% premium to that price. Second, since our offer Ramtron has had cumulative net losses of five cents per share. Third, your stockholders have been increasingly vocal about their desire for you to sell Ramtron. These factors, along with your history of rejecting out-of-hand our prior offer, have convinced us that we must make our offer public at this time so that your stockholders are aware of our efforts. I have attached copies of my prior letters to you to this letter.
Although we would prefer to proceed through a negotiated agreement, we are fully committed to this transaction, and will take the steps necessary to complete it. We believe that a transaction between our two companies would be well received by your stockholders, and we are committed to providing them with an opportunity to express their views on our proposal.
This letter does not represent or create any legally binding or enforceable obligations. No such obligations will be imposed on either party unless and until a definitive agreement is signed by both Cypress and Ramtron.
We request a response to our proposal by 5:00 p.m. Pacific Daylight Time on Tuesday, June 19, 2012. In light of the significance of this proposal to your stockholders and ours, as well as the potential for selective disclosure, we are publicly releasing the text of this letter.
Very truly yours,
T.J. Rodgers
President and Chief Executive Officer
On June 12, 2012,
Cypress also issued a press release announcing that it had submitted a proposal to Ramtron to acquire all of its outstanding stock for $2.48 per share in cash and providing the full text of the March 8, March 10 and April 11, 2011 letters.
Later on June 12, 2012, the Board convened a telephonic meeting to discuss the Cypress June 12 letter and press release. Also at this meeting the Board authorized the retention of Shearman & Sterling, as the Company’s special legal counsel, and Needham & Company, as the Company’s financial advisor. Also at this meeting the Board discussed the Change of Control Severance Agreements, or amendments thereto, which were previously most recently discussed at the June 6, 2012 meeting of the Board, and authorized Dr. George, as chairman of the Compensation Committee of the Board, to finalize such agreements.
On June 13, 2012,
the Board convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss the Cypress June 12 letter. Representatives of Shearman & Sterling reminded the Board of its fiduciary duties in connection with the evaluation of, and response to, an unsolicited acquisition proposal. Representatives of Needham & Company discussed several tactical considerations and proposed responses to Cypress’s June 12 proposal. The Board determined to reconvene in the coming days to further discuss the proposal. Following the Board meeting, Ramtron issued a press release that confirmed receipt of Cypress’s June 12 proposal, and advised its stockholders that it would review and consider the proposal, in consultation with its financial and legal advisors, and determine the course of action that it believed is in the best interests of Ramtron and its stockholders.
On June 14, 2012,
the Board convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s June 12 proposal. Management of the Company updated the Board on its process in generating an updated financial model in connection with the Company’s strategic plan. Representatives of Needham & Company informed the Board that they had begun preparing a financial analysis of the Company. The Board also approved the establishment of a Strategic Transaction Committee (the “Committee”), which committee consists of Dr. Howard, Mr. Balzer, Theodore J. Coburn, James E. Doran and Dr. George, to assist the Board in considering any acquisition proposals from Cypress and any transactions that may be considered as alternatives to Cypress’s indication of interest. The Board also discussed the previously negotiated and prepared Change in Control Severance Agreements, or amendments thereto, with Messrs. Balzer, Zimmer, Richards and Shiau, and certain other members of the Company’s management. The Board subsequently approved such Change in Control Severance Agreements pursuant to an action by unanimous written consent, dated June 14, 2012.
On June 15, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to discuss Cypress’s June 12 proposal, as well as evaluating other strategic alternatives. Members of the Company’s management and representatives of Needham & Company discussed contacts with various potential interested third parties. Representatives of Shearman & Sterling provided an overview of certain provisions in the Company’s bylaws, and recommended an amendment to the bylaw relating to the Company’s stockholders’ ability to take action by written consent.
On June 16, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s June 12 proposal. Representatives of Needham & Company then discussed with the Committee their preliminary financial analyses related to Cypress’s June 12 proposal and addressed the Committee’s questions concerning those analyses. Representatives of Shearman & Sterling again reminded the Committee of its fiduciary duties in connection with the evaluation of strategic alternatives.
Later on June 16, 2012, the Board convened a telephonic meeting, at which management and representatives of Shearman & Sterling were present, to further discuss Cypress’s June 12 proposal. The Board also approved an amendment to the Company’s bylaws to allow the Board to fix a record date in order that the Company may determine the stockholders entitled to consent to corporate action in writing without a meeting.
On June 17, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s June 12 proposal. After discussion, and taking into account the preliminary financial analyses presented by Needham & Company at the June 16 meeting, the Committee determined to reject Cypress’s June 12 proposal, and to engage in an effort to evaluate all strategic alternatives. The Committee then authorized Needham & Company to begin contacting interested third parties.
Later on June 17, 2012, Mr. Balzer called Mr. Rodgers and left him a voicemail regarding the Committee’s conclusion and inviting Cypress to participate in Ramtron’s process to evaluate strategic alternatives.
Prior to the market open on June 18, 2012,
Ramtron issued a press release regarding its rejection of Cypress’s June 12 proposal, and its decision to engage in a process to explore strategic alternatives including, but not limited to, the potential sale of Ramtron. Later that day, Mr. Rodgers returned Mr. Balzer’s June 17 call and discussed with Mr. Balzer the rejection of Cypress’s proposal and the Company’s process to explore strategic alternatives. A representative of Needham & Company then called a representative of Greenhill & Co., LLC (“Greenhill”), Cypress’s financial advisor, and indicated that Ramtron would like Cypress to participate in Ramtron’s evaluation of strategic alternatives and that it would send a draft confidentiality agreement as part of that process. After the call, Needham & Company sent Greenhill the confidentiality agreement referenced on the call. Cypress declined to execute the confidentiality agreement or participate in Ramtron’s process of exploring strategic alternatives.
Later on June 18, 2012, the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s proposal, and the Committee’s evaluation of strategic alternatives. Mr. Balzer and representatives of Needham & Company provided an overview of their conversations with Cypress and Greenhill. Representatives of Needham & Company also provided an update on the status of their discussions with other third parties.
On June 19, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s proposal, and the Committee’s evaluation of strategic alternatives. Representatives of Needham & Company and members of the Company’s management also provided an update on the status of their discussions with certain third parties.
On June 20, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss Cypress’s proposal, and the Committee’s evaluation of strategic alternatives. Representatives of Needham & Company summarized the response from interested third parties, and the status of the negotiations of confidentiality agreements with such third parties. Representatives of Shearman & Sterling provided an overview of United States and foreign antitrust approval processes. Also on June 20, 2012, the Board and the Compensation Committee of the Board convened consecutive telephonic meetings to discuss and approve the compensation for the members of the Committee.
On June 21, 2012,
Cypress commenced the Offer and sent the following letter to Dr. Howard and Mr. Balzer:
June 21, 2012
Gentlemen:
I am writing to convey to you our decision to increase our proposal to acquire Ramtron International Corporation to $2.68 per share in cash. Our revised proposal represents a premium of 48% over Ramtron’s closing price of $1.81 per share on June 11, 2012, the day before we publicly disclosed our initial offer of $2.48 per share in cash. As before, our offer provides Ramtron’s stockholders with certain value and immediate liquidity at a substantial premium.
This morning, we are also commencing a tender offer to purchase all outstanding shares of Ramtron at our revised per share price. We are resolute in our desire to acquire Ramtron and we think that now is the appropriate time to take our offer directly to Ramtron’s stockholders so that they can consider it for themselves. We urge the Ramtron Board of Directors to remove its “poison pill” and allow your stockholders an opportunity to freely participate in our offer.
Although we continue to believe that our prior offer represented full and fair value, we have increased our offer at this time in the interest of quickly consummating a transaction. Our revised offer restores to your stockholders much of the value eroded as a result of the combination of your recent losses and your decision to pursue a dilutive equity offering in 2011. In addition, we note your recent public announcement that you have amended change of control agreements originally put in place following our offer in March 2011. Although we recognize the value of Ramtron’s talented employees and we intend to honor those agreements, we are increasingly concerned about the growing magnitude of these costs and the potential effect that they would have on the price that any acquirer can offer for Ramtron.
We have learned that you have begun an uncertain and undefined review of strategic alternatives with no timetable established. We were surprised that you proposed as a condition to our participation in that process a two year standstill agreement that would completely restrict us from communicating with, or making an offer to, you or your stockholders. We simply cannot agree to such a restriction. Our offer is not subject to any due diligence or financing conditions and we do not require access to any of Ramtron’s confidential information in order to proceed.
We look forward to meeting with Ramtron’s stockholders in the days ahead so that we can discuss the merits of our offer with them. We are confident that they will agree that our offer represents the best alternative available to Ramtron. We will continue to explore all necessary steps to ensure that Ramtron’s stockholders can consider our offer.
It continues to be our preference to engage in a negotiated transaction. We urge the Ramtron Board of Directors to do the right thing and immediately begin negotiations with us so that we may deliver significant value to your stockholders. We and our advisors stand ready at any time to meet and review our offer directly with you.
Very truly yours,
T.J. Rodgers
President and Chief Executive Officer
On June 21, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to discuss the Offer. Representatives of Needham & Company and Shearman & Sterling discussed with the Committee the terms of and conditions to the Offer, the nature and timing of the Offer, including the current market price of Ramtron’s common stock, the Company’s strategic plan and other business opportunities and the status of discussions with other interested parties with respect to a potential strategic transaction involving the Company. Representatives of Needham & Company and Shearman & Sterling addressed various questions and topics of discussion raised by the Committee related to the Offer process.
On June 22, 2012,
a representative of Needham & Company had a telephone call with a representative of Greenhill, in which the Greenhill representative indicated that Cypress believed that a confidentiality agreement with a standstill provision was neither necessary nor appropriate.
On June 25, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss the Offer and the status of discussions with other interested parties with respect to a potential strategic transaction involving the Company. After the Committee excused the representatives of Needham & Company, representatives of Shearman & Sterling provided the Committee with an overview of the putative class action complaint against Ramtron and certain of its officers and directors filed in the District Court for El Paso County, Colorado, captioned Dent v. Ramtron International Corporation, et al., Docket No. 44906737.
On June 28, 2012,
the Committee convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present, to further discuss the Offer and the status of discussions with other interested parties with respect to a potential strategic transaction involving the Company. Also on June 28, 2012, the Board convened a telephonic meeting, at which representatives of Shearman & Sterling were present. At this meeting the Board took action with respect to the Company’s stockholder rights plan to defer the “Distribution Date” (as defined in the stockholder rights plan) that would otherwise occur ten business days after commencement of the Offer to such time as immediately prior to the acceptance for payment of shares pursuant to the Offer, or such other time as determined by the Board in its sole discretion.
On July 3, 2012,
the Board convened a telephonic meeting, at which management and representatives of Shearman & Sterling and Needham & Company were present. Representatives of Needham & Company discussed with the Board the status of discussions with other interested parties with respect to a potential strategic transaction involving the Company. Representatives of Needham & Company then discussed with the Board its financial analyses related to the Offer and addressed the Board’s questions concerning those analyses. In addition, representatives of Shearman & Sterling reminded the Board of its fiduciary duties in connection with the evaluation of, and response to, an unsolicited acquisition proposal. A discussion then ensued covering various topics including management’s views regarding the Company’s business, financial condition and future prospects and during which representatives of Shearman & Sterling and Needham & Company addressed various questions and topics of discussion raised by the Board related to the Offer process. Following discussion, Needham & Company rendered an oral opinion to the Board, subsequently confirmed in writing, that as of July 3, 2012 and based upon and subject to the assumptions and other matters set forth in its written opinion (a copy of which is attached as Annex B hereto), the consideration proposed to be paid to the holders of the Shares (other than Cypress, Purchaser and their respective affiliates) pursuant to the Offer was inadequate from a financial point of view to such holders. After discussion, the Board unanimously determined that the Offer is inadequate, undervalues the Company and is not in the best interests of the Company or its stockholders and unanimously determined to recommend that the Company’s stockholders reject the Offer and not tender their Shares into the Offer.
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