PMC-Sierra board flip flops again, now backs Skyworks bid

Citing "recent stock market volatility exacerbated by recent geopolitical events" -- likely a reference to the terrorist attacks in Paris -- the board at PMC-Sierra, Inc. (NASDAQ: PMCS) has reversed course again and thrown its weight behind the acquisition bid from Skyworks Solutions, Inc. (NASDAQ: SWKS). The decision leaves competing bidder Microsemi Corp. (NASDAQ: MSCC) to once again argue that its cash and stock bid is still worth more than the all-cash bid from Skyworks or raise the bid's value.

The PMC-Sierra board would appear to prefer to deal with the team at Skyworks, whose original bid the PMC board accepted in October (see "Skyworks agrees to acquire PMC-Sierra"). Microsemi launched an unsolicited bid for PMC in November, which the PMC board suggested would prove superior under the definition contained in the Skyworks agreement. Skyworks raised its offer, then Microsemi raised again.

The PMC board originally rejected the Microsemi counteroffer because of the stock component (see "PMC-Sierra board rejects Microsemi bid, backs Skyworks"). Microsemi appeared last week to convince the board and its legal advisors that their concerns wouldn't pass close examination (see "PMC-Sierra board reverses, now backs Microsemi bid").

However, recent events appear to have given both the PMC board and its legal and advisory team the confidence to return to Skyworks. The company noted that, based on the closing price of Microsemi stock on November 13, the value of Microsemi's proposal had dropped from its original $11.88 per share of PMC common stock to $11.77.

Skyworks' bid is valued at $11.60 per PMC common share. Yet the PMC board is once again asserting that the uncertainty of the final value of Microsemi's bid outweighs the fact that it currently remains more lucrative.

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