Montage Technology To Be Acquired By Chinese State-owned Company

(RTTNews) - China-based chipmaker Montage Technology Group Ltd. (MONT) has agreed to be acquired by Chinese state-owned Shanghai Pudong Science and Technology Investment Co. Ltd. or PDSTI for $22.60 per share, the two companies said Wednesday. The deal values Montage's equity at about $693 million.

The acquisition price of $22.60 per share represents a 14.3 percent premium to Montage's closing stock price of $19.78 per share on Tuesday. PDSTI had earlier offered to acquire Montage for $21.50 per share in cash.

Shanghai-based Montage Technology provides various analog and mixed-signal semiconductor solutions for the home entertainment and cloud computing markets. The company, founded in 2004, provides set-top box solutions, including HDTV and SDTV semiconductor solutions, such as tuners, demodulators, and decoders. Montage Technology recorded annual revenues of about $110.9 million for 2013.

PDSTI is a wholly state-owned limited liability company directly under Pudong New Area government of Shanghai. By the end of 2013, PDSTI had registered capital of RMB2.6 billion and managed the assets of over RMB10 billion.

Montage's board of directors has unanimously approved the deal and recommended that the company's shareholder vote in favor of the merger. Montage expects to hold a special meeting of its shareholders to consider and act upon the proposed transaction as promptly as practicable.

Dr. Howard Yang, Chairman and Chief Executive Officer at Montage said, "After a review of strategic alternatives, the Montage board of directors is pleased to reach this agreement, which provides shareholders with substantial cash value, as well as a premium to our unaffected share price. In addition, Montage believes the transaction will provide additional operational flexibility and position us to invest more strategically to drive powerful innovation and deliver cutting edge customer solutions."

In mid-March, Montage Technology said its board of directors plan to evaluate strategic alternatives, including a possible sale of the company, in order to increase shareholder value.

Stifel, Nicolaus & Co, Inc. is serving as financial advisor to Montage, while O'Melveny & Myers LLP is serving as its legal advisor. For PDSTI, Barclays Bank PLC and China International Capital Corporation Limited are serving as financial advisors, while Kirkland & Ellis is serving as legal advisor.

MONT is trading at $21.72, up $1.91 or 9.66 percent on a volume of 981,494 shares.