February 23, 2011 / 5:04 PM / 9 years ago

Standard Microsystems says not to raise Conexant bid

* SMSC says not to buy Conexant at a higher premium

* Conexant termed pvt equity offer superior

* Conexant shares down 7 pct

* SMSC shares up 3 pct

(Adds details, analyst comment, share movement)

BANGALORE, Feb 23 (Reuters) - Chipmaker Standard Microsystems Corp SMSC.O said it does not plan to increase its $2.25 a share offer for Conexant Systems Inc CNXT.O, paving the way for Golden Gate Private Equity Inc to take control of the communications and network chipmaker.

“SMSC has solid organic growth opportunities and Conexant would have been incremental as opposed to a must-have asset,” ThinkEquity LLC analyst Sujeeva De Silva told Reuters.

SMSC didn’t want to get into a bidding war for this asset, and by backing away the company has indicated it is price sensitive which is positive for the investors, he said.

Standard Microsystems said Conexant had informed the company that Golden Gate Private Equity’s cash offer of $2.35-$2.45 per share was a “superior proposal.”

“While we believed that SMSC’s acquisition of Conexant would have provided for a highly complementary combination of our businesses, we have elected not to pursue the merger at a higher premium,” Standard Microsystems Chief Executive Christine King said in a statement.

On Jan 10, Standard Microsystems, which makes chips that help PCs communicate with keyboards and external drives, offered to buy Conexant for about $200 million in a cash-and-stock deal. [ID:nSGE70908I]

A month later, Golden Gate came up with a rival bid. [ID:nSGE7160DG]

Golden Gate, which has $9 billion in capital under management, counts former Conexant Chief Executive Don Artusi among its managers.

If Conexant terminates its merger pact with Standard Microsystems, the chipmaker will get a termination fee of $7.7 million.

Shares of Conexant were down 7 percent at $2.34 on Wednesday on Nasdaq, while those of Stadard Microsystems were up 3 percent at $24.16.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Vyas Mohan)

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