Wedbush Downgrades Atmel After Dialog Semi Buyout: What You Need To Know

• The share price of Atmel Corporation ATML has declined by almost 12 percent over the past five trading days.
• Wedbush’s Betsy Van Hees has downgraded the rating on the company from Outperform to Neutral, while maintaining the price target at $10.
• The downgrade follows the announcement by Dialog Semiconductor regarding the acquisition of Atmel for a total consideration of $4.6 billion.

The UK-based company announced that it intended to acquire Atmel in a stock and cash transaction, valued at $4.6 billion or $10.62 per share, representing a 43 percent premium to Atmel’s closing price on September 18.

According to the Wedbush report, “ATML shareholders will receive $4.65 of cash per share and 0.112 shares of Dialog American Depository Shares (ADS) at a fixed exchange ratio of $5.77,” with the deal being completed with $2.5 billion in equity and $2 billion in cash.

Dialog Semiconductor expects the deal to be closed in 1Q16 and announced that Atmel would get two board seats of the total of 10 sears. The deal has received the approval of the boards of both companies and Dialog Semiconductor expects all the regulatory approvals and customary closing conditions to be completed by 1Q16.

Analyst Betsy Van Hees believes that the acquisition would be a win/win for Atmel’s shareholders and the best possible outcome for the company. A competing bid is unlikely to emerge, according to Van Hees.