Dallas, Texas 12/04/2014 (FINANCIALSTRENDS) – Spansion Inc. (NYSE:CODE) has gained nearly 25% through this week, and is trading roughly 140% above its 52-week low of $12.12. The stock recently hit a new 52-week high of $29.30, largely driven by its takeover announcement by the industry player Cypress Semiconductor Corporation (NASDAQ:CY). The stock of Cypress has also rallied 18% through this week and hit a fresh 52-week high of $12.62.
As per the agreement, shareholders of each company will get 50% of the new entity. Spansion shareholders will receive 2.457 Cypress shares for each share of the company they own. This all-stock transaction is valued at about $4 billion. Market valuations of Spansion and Cypress have soared to $1.71 billion and $1.91 billion, respectively.
Joint Conference Presentation
Spansion Inc. (NYSE:CODE) and Cypress also webcast a joint presentation at the 18th Credit Suisse Annual Technology Conference in Scottsdale, AZ. The webcast was scheduled on December 2, 2014. CEO of Spansion, John Kispert, and CEO of Cypress, T.J. Rodgers, presented on behalf of the companies.
This presentation also replaced Spansion’s previously announced webcast, which was scheduled on December 3, 2014.
Many shareholder rights attorneys are investigating whether the Board of Directors of Spansion Inc. (NYSE:CODE) exercised their due diligence to adequately compensate its shareholders while negotiating the transaction with Cypress.
Spansion recently reported strong 3Q14 earnings with revenue of $315.9 million and net loss of $10.8 million or $0.18 per diluted share. It compared with last year’s net sales of $273.4 million and net loss of $36.9 million or $0.63 per diluted share. The company also reported strong momentum and demand in automotive and its newer products like HyperFlash™ memory and NAND.
Despite the improving financial results and market leadership, merger consideration at $25.63 per share represents only 12.1% premium to Spansion’s closing price on December 1, 2014. It is much lower than the average one-day premium of approximately 35% for comparable transactions over the past five years.