Silicon Motion to seek damages after MaxLinear scraps deal (updated)

MaxLinear

16/08/2023 22:56

(Adds MaxLinear's response in paragraph 4)
       Aug 16 (Reuters) - Taiwan-based Silicon Motion  SIMO.O 
on Wednesday blamed MaxLinear  MXL.O  for breaching their merger
agreement and said it would seek damages in excess of the
termination fee from the U.S. company.
    MaxLinear scrapped a nearly $4 billion cash-and-stock deal
in July to acquire memory-controller maker Silicon Motion. The
acquisition was announced in May last year.
    MaxLinear may be required to pay Silicon Motion a
termination fee of $160 million, according to the agreement in
May last year. However, Silicon Motion would be liable to pay
$132 million if the deal was terminated under some
circumstances.
    MaxLinear said Silicon Motion's action is without merit and
it would "vigorously defend" its right to terminate the deal
without paying a penalty in arbitration. 
    In July, MaxLinear had said the company had suffered a
"material adverse effect", giving it the right to terminate the
merger agreement.
    "MaxLinear's professed reason .... is a pretext and has been
rejected in case after case under Delaware law, which governs
the MAE issue, where buyers have sought to back out of merger
agreements at the eleventh hour," Silicon Motion said on
Wednesday.
    The company's termination of the deal will be subject of an
arbitration in the Singapore International Arbitration Centre.
    Silicon Motion also said the company intends to resume
declaring and paying dividends on an annual basis.
    

 (Reporting by Akash Sriram in Bengaluru, additional reporting
by Sourasis Bose; Editing by Saumyadeb Chakrabarty and Anil
D'Silva)
 ((Akash.Sriram@thomsonreuters.com; @HoodieOnVeshti on Twitter;
+91-74116-87774;))