SAN JOSE, Calif. -- After several bids, Cadence Design Systems Inc. has withdrawn its unsolicited proposal to acquire Mentor Graphics Corp. for $1.6 billion.
Mentor failed to cooperate or talk to Cadence, forcing Cadence to scrap the plan, according to Cadence. However, Mentor claims the move is ''inconsistent'' with both Cadence's recent public statements and recent communications between the parties.
Cadence, according to Mentor, ''was facing challenges in obtaining financing for the transaction. Additionally, today the Federal Trade Commission (FTC) made a 'second request' indicating that regulatory review of the previously proposed transaction would have been protracted.''
In June, Cadence submitted a proposal to the board of directors of Mentor to acquire Mentor for $16.00 per share in cash. But all along, Mentor rejected those bids.
Cadence issued a statement, saying that Mentor continued to reject the takeover plan. ''It is unfortunate for Mentor Graphics shareholders, however, that despite our best efforts, Mentor Graphics' board and management were unwilling to engage in substantive discussions on what we believe would have been a compelling opportunity to create significant value for both companies' shareholders and customers,'' according to a statement from Cadence.
''Mentor Graphics' failure to engage in substantive discussions on our all-cash premium proposal prevented us from confirming for our financing sources the significant synergies associated with this transaction,'' according to the EDA company.
In any case, it leaves egg on the face of Cadence. The EDA house is struggling and hoped that Mentor could shore up its design-for-manufacturing (DFM) and other product fronts.
It also raises questions about the fate of Michael Fister, president and CEO of Cadence, who bet the farm on the success of the acquisition of Mentor, analysts said.
Separately, Cadence also announced today that its board has expanded the company's authorized share repurchase by up to an additional $500 million, subject to market conditions. Together with the company's current share repurchase program, Cadence's total share repurchase authorization is now approximately $912 million.