Quickturn Design Systems Inc. on Wednesday rebuffed a sweetened $14-a-share bid by Mentor Graphics Corp., saying it will stand by its $253-million merger deal with Cadence Design Systems Inc.
Quickturn, a maker of diagnostic tools that test semiconductor designs, recommended that shareholders reject Mentor's offer to buy up to 14.9% of its shares. One analyst who follows the industry agreed that the Cadence offer is probably superior to Mentor's.
Quickturn has agreed to be bought by Cadence in a stock swap valued at $14 a share. Cadence, based in San Jose, emerged as a white knight earlier in December, when Mentor was pursuing a $12.13-a-share unsolicited cash takeover.
On Tuesday, Mentor raised its bid to $14 a share, but narrowed the offer to 14.9% of the shares outstanding. Mentor could acquire that much without triggering San Jose-based Quickturn's "poison pill" anti-takeover defense.
"Quickturn's board has accepted an offer from Cadence that involves no financing issues, provides all Quickturn stockholders with an attractive, immediate premium for their shares, and allows them to participate in the long-term benefits from this strategic combination," Quickturn Chief Executive Keith Lobo said in a statement.
"In contrast," Lobo said, "Mentor has not demonstrated that it has committed financing for such a proposal."
Officials from Quickturn, Mentor and Cadence were unavailable for comment. All three make products that test computer systems.
Wilsonville, Ore.-based Mentor began its hostile takeover battle in August, offering to buy all of Quickturn for $216 million, or $12.13 a share.
Quickturn shares fell 6 cents to close at $14.19 on Nasdaq; Mentor shares were unchanged at $8.06, also on Nasdaq; and Cadence shares rose 50 cents to close at $28 on the New York Stock Exchange.