A China-based corporate venturing unit of publisher International Data Group (IDG) has revised its offer to gain agreement to buy Memsic, a Nasdaq-listed micro electromechanical system (MEMS) solutions provider based in the US.
IDG-Accel China Capital II and its affiliates, MZ Investment Holdings and MZ Investment, will pay $4.225 per share in cash, $88.5m, for Memsic. IDG had originally offered $4 per share on November 21. Its revised bid is a 143% premium over Memsic’s share price of $1.74 just before this first offer.
Affiliates of IDG currently own 19.5% of Memsic.
Roger Blethen, Memsic’s chairman of the special committee reviewing the buyout offer, said: “The board of directors approved the IDG transaction because it strongly believes, after carefully considering the company’s strategic alternatives, that it is in the best interest of Memsic stockholders and the best of the available alternatives. We believe the $4.225 price is fair and that making that value available to our stockholders immediately in cash is more favorable to them than the other alternatives available, including remaining independent.”
Potomac Capital Partners, another shareholder of Memsic,has reportedly supported IDG’s offer, according to a Morrison & Forrester Unsolicited View/Situation Chronology report.
However, former US Securities and Exchange Commission attorney Willie Briscoe and the securities litigation firm of Powers Taylor are investigating the sale of Memsic, according to Business Wire news reports.
Briscoe said: “Based upon the size of the deal and other factors, we believe this transaction may undervalue [Memsic’s]’ stock. Our proposed lawsuit will seek to obtain the highest share price for all shareholders.”
In December 2007, Memsic raised $60m in its Nasdaq flotation at a $226m market capitalisation. The company sold six million shares at $10 per share.
Memsic was founded in 1999 and prior to its initial public offering had raised more than $33m from investors, including venture capital firms Celtic House Venture Partners, Still River Fund, InveStar Capital and CID Group, according to a 2007 news story published by EE Times in 2007.