Elantec jumps after Intersil offers $1.4 bln By Chris Kraeuter, CBS.MarketWatch.com Last Update: 4:04 PM ET Mar 11, 2002 IRVINE, Calif. (CBS.MW) - Elantec Semiconductor shares jumped 11 percent Monday to a 52-week high after Intersil said it will buy Elantec for $1.4 billion in stock and cash.Intersil's stock tumbled 15 percent even though the analog and mixed-signal chipmaker also boosted its financial targets for the first quarter. Elantec shareholders will get 1.24 shares of Intersil stock and $8 in cash for each Elantec share, valuing the analog chipmaker at $53.45 per share. Elantec stock rose $4.57 to $45.77 -- a one-year high -- while Intersil lost $5.48 to $31.17. The deal represents a 15 percent premium to the 30-day average exchange ratio of Elantec (ELNT: news, board) and Intersil (ISIL: news, board) stocks, the companies said in a statement. Intersil expects the acquisition to result in cost savings through consolidation. With these cost savings and excluding the impact of amortization expenses, Intersil said the acquisition should add to earnings in 2003. The deal should close in the second quarter of this year."We believe that combining our businesses will allow us to become a more powerful and strategic supplier of analog and wireless products to many of our key customers, further enhancing our value proposition," said Elantec President and CEO Rich Beyer, according to a statement. "In addition, Intersil's strong sales and engineering support in a number of international markets should drive incremental sales of Elantec products."When the deal closes, Beyer will become president and chief executive of Intersil. Intersil President and CEO Greg Williams will become executive chairman focusing on corporate, wireless and analog strategy and Elantec Chairman Jim Diller will join Intersil's board, as will Beyer. As for first-quarter financial targets, Intersil said demand is accelerating with orders running ahead of expectations. Currently, Intersil expects revenue to increase sequentially by 6 to 8 percent, versus a previous forecast of 3 to 5 percent. The company increased its first-quarter earnings-per-share forecast to 13 cents from 12 cents. Analysts surveyed by Thomson Financial/First Call expected earnings of 12 cents a share on revenue of $126.4 million, on average.
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