LOS ANGELES (Reuters) - Cadence Design Systems CDNS.O on Friday ended its effort to buy rival chip design software maker Mentor Graphics Corp MENT.O, saying that financing terms were no longer attractive.
Shares of Mentor fell 20 percent while Cadence, which also said its board had authorized an additional $500 million in stock buybacks, saw its shares rise nearly 11 percent.
Mentor in July had rejected the roughly $1.5 billion offer as too low. Cadence said on Friday that Mentor declined to engage in substantive talks with it.
Cadence would have had to raise in excess of $1.1 billion in debt to pay for the unsolicited, all-cash bid.
Financial analysts had questioned whether Cadence could raise the necessary debt after it lowered its financial outlook last month. <ID:nN14485269>
Cadence, which in July posted disappointing second-quarter results and lowered its 2008 financial outlook, had said the acquisition is vital to speed up growth, with stiff competition squeezing margins.
Shares of Cadence rose 77 cents to $7.93 while Mentor shares fell $2.83 to $11.17.
Reporting by Peter Henderson and Anupreeta Das, editing by Phil Berlowitz
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