November 18, 2015 / 2:16 PM / in 2 years

Chipmaker Pericom rejects Montage's sweetened bid

(Reuters) - Pericom Semiconductor Corp PSEM.O rejected on Wednesday Montage Technology Group Ltd’s raised $442 million offer, although it trumped a rival bid from Diodes Inc DIOD.O, citing regulatory hurdles and a lack of committed financing.

Pericom, which makes connectivity and power management chips, maintained that Montage was “unable or unwilling to obtain fully committed financing.”

However, Chinese analog chip maker Montage said later in the day that it had secured committed financing, and said Pericom was employing “scare tactics”.

Montage also urged Pericom shareholders to vote against Diodes’ offer ahead of a special shareholder meeting on Friday.

Privately held Montage said it would now offer $19 per share in cash for Pericom, higher than the $18.50 it had offered on Sept. 30.

The semiconductor industry has seen rapid consolidation in the recent months as companies look to meet demand for cheaper chips and new products to power Internet-connected gadgets.

The new offer comes a week after Pericom asked shareholders to vote for a merger with Diodes.

Diodes raised its offer for Pericom to $17.75 per share on Nov. 6 from $17 and said it had tied up financing for the deal with Bank of America.

Pericom, whose chips are used in cars, telecom networks and other devices, accepted Diodes’ raised offer three days later.

Pericom’s shares closed up 1.4 percent at $17.90 on Wednesday.

Reporting by Kshitiz Goliya and Anya George Tharakan in Bengaluru; Editing by Kirti Pandey and Sriraj Kalluvila

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