Shareholders in Parthus Technologies voted in favour of the firm's proposed merger with a division of DSP Group yesterday in a deal that will value the firm at between $150 million (€153.8 million) and $170 million.
The market capitalisation of the new company, which will be called ParthusCeva, will fall substantially below the $450 million figure expected when the merger was first announced in April.
This drop is due to a 70 per cent slump in Parthus's share price - from 45 pence sterling to 13 pence - during this period.
Answering questions about the slide from shareholders at the firm's extraordinary general meeting in Dublin, Parthus chief financial officer Ms Elaine Coughlan said it was a feature of the chip sector. "The shares have dropped 70 per cent since the deal was announced as have our peers such as MIPS, which is off 80 per cent, and ARM, which is off 60 per cent since April," she said.
Speaking after the meeting, company president Mr Kevin Fielding said it would give guidance on future revenues for ParthusCeva on October 22nd when Parthus announced third-quarter results.
He confirmed the firm would not meet its previous revenue guidance of $80 million for 2003 in light of the current difficult economic environment.
ParthusCeva will be formed on October 17th following an application for approval to the High Court next week by Parthus. Shares in Parthus closed at 13 pence on the London Stock Exchange yesterday, up almost 4 per cent.
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