Acquisition of Spansion Inc. (CODE) by Cypress Semiconductor Corp. (CY) May Not Be in Shareholders' Best Interests

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Dec 02, 2014, 02:59 ET

SAN DIEGO and SUNNYVALE, Calif., Dec. 2, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Spansion Inc. (NYSE: CODE) by Cypress Semiconductor Corp. (NASDAQ: CY). On December 1, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Cypress will acquire Spansion. Under the terms of the agreement, Spansion shareholders will receive 2.457 Cypress shares valued at $25.63, for each Spansion share of common stock they own.

View this information on the law firm's Shareholder Rights Blog:
www.robbinsarroyo.com/shareholders-rights-blog/spansion-inc

Is the Proposed Acquisition Best for Spansion and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at Spansion is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.

As an initial matter, the $25.63 merger consideration represents a premium of only 12.1% based on Spansion's closing price on December 1, 2014. This premium is significantly below the average one-day premium of over 35% for comparable transactions within the past five years. Further, the $25.63 merger consideration is below the target price of $26.00 set by an analyst at Sterne Agee & Leach on October 30, 2014.

On October 30, 2014, Spansion released its earnings results for its third quarter 2014, reporting strong quarterly results. In particular, Spansion reported revenue of $315.9 million, a 14.9% year-over-year increase, and boasted of continuing embedded market leadership and strong demand for its newer products. In commenting on these results, Spansion Chief Executive Officer John Kispert remarked, "We executed well in the third quarter with gross margins, EPS and cash flow from operations exceeding our estimates. Our product innovation and customer acceptance of newer products is accelerating with strong demand in flash, microcontroller, analog and system-on-chip solutions. With our robust product development pipeline and design win momentum, we are well positioned for growth across automotive, communications and industrial markets."

Further, Spansion's results have significantly beat analyst estimates over the past year. Specifically, the Company reported adjusted EPS and adjusted net income, respectively, that beat analyst estimates during three out of the last four quarters.

In light of these facts, Robbins Arroyo LLP is examining Spansion's board of directors' decision to sell the company now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.

Spansion shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. Spansion shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.

Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The law firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.

Attorney Advertising. Past results do not guarantee a similar outcome.

Contact:
Darnell R. Donahue
Robbins Arroyo LLP
600 B Street, Suite 1900
San Diego, CA 92101
[email protected]
(619) 525-3990 or Toll Free (800) 350-6003
www.robbinsarroyo.com

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SOURCE Robbins Arroyo LLP