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Mentor Gets Judge's OK to Fight Quickturn's Defense

October 13, 1998|From Bloomberg News

Mentor Graphics Corp., maker of computer software used to design electronics, can proceed with its suit aimed at dismantling rival Quickturn Design Systems Inc.'s takeover defenses, a judge ruled Monday.

Mentor made a $216-million hostile bid for Quickturn in August, and the San Jose-based company turned it down and set up takeover defenses designed to delay Mentor's acquisition for nine months. Mentor sued in Delaware's Chancery Court to have those defenses invalidated.

Judge Jack Jacobs denied Quickturn's bid to have the defenses declared legally valid, clearing the way for a trial next week on Mentor's challenges.

"The most important reason a trial is needed is that a determination of the issues presented could have far-reaching effects in the development of law governing mergers and acquisitions," Jacobs said in his 12-page order.

His ruling is the latest development in the recent round of legal clashes between Mentor and Quickturn, which include a three-year patent-infringement dispute and litigation in three courts over the takeover bid.

Mentor and Quickturn both sell computer software that helps engineers design electronic products such as computer chips, personal computers and networking equipment.

Mentor officials said Jacobs' ruling means their $12.13-per-share bid for Quickturn is still viable.

Quickturn officials, however, said they remain confident that Jacobs, who will hear the case without a jury, ultimately will uphold the defenses' validity.

Shares of Wilsonville, Ore.-based Mentor rose $1.25 to close at $7.75 on Nasdaq, while Quickturn shares fell 6 cents to $9.56, also on Nasdaq.

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