SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation
Statement under Section 14(d)(4) of the
Securities
Exchange Act of 1934
Genesis
Microchip Inc.
(Name
of Subject Company)
Genesis
Microchip Inc.
(Name
of Person(s) Filing Statement)
Common
Stock, par value $0.001 per share
(Title
of Class of Securities)
37184C103
(CUSIP
Number of Class of Securities)
Elias Antoun
President
and Chief Executive Officer
Genesis
Microchip Inc.
2525
Augustine Drive
Santa
Clara, CA 95054
(408)
919-8400
(Name,
address and telephone number of person
authorized
to receive notices and communications on
behalf
of the person(s) filing statement)
With
copies to:
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Bradley
L. Finkelstein, Esq.
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Wilson
Sonsini Goodrich & Rosati
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Wilson
Sonsini Goodrich & Rosati
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Professional
Corporation
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Professional
Corporation
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1301
Avenue of the Americas, 40th Floor
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650
Page Mill Road
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New
York, New York 10019
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Palo
Alto, CA 94301
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(212)
999-5800
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(650)
493-6811
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x
Check
the box if
the filing relates solely to preliminary communications made before the
commencement of a tender offer.
STMICROELECTRONICS
TO ACQUIRE GENESIS MICROCHIP
Acquisition
strengthens
STMicroelectronics’s position as a semiconductor technology leader in the
consumer electronics market
GENEVA,
Switzerland and SANTA CLARA, California, December 11, 2007 —
STMicroelectronics
(NYSE:STM) and Genesis Microchip Inc. (NASDAQ:GNSS) announced today that they
have entered into a definitive agreement for STMicroelectronics to acquire
Genesis Microchip. The acquisition confirms STMicroelectronics as a leading
System-on-Chip (SoC) technology provider to the rapidly growing digital
television and display markets.
Under
the
terms of the agreement, STMicroelectronics will commence a cash tender offer
to
purchase all of the outstanding shares of Genesis Microchip Inc. for $8.65
per
share, net to the holder in cash, implying a total equity value of approximately
$336 million. Following completion of the tender offer, STMicroelectronics
will
complete a second-step merger in which any remaining common shares of Genesis
Microchip Inc. will be converted into the right to receive the same per share
price paid in the tender offer. The offer price represents a premium of 60%
to
Genesis Microchip’s closing share price on Monday, December 10, 2007 and 26% to
the average closing share price during the last sixty trading days prior to
this
announcement. During
the twelve months ended September 30, 2007, Genesis reported revenues of $191
million. As of September 30, 2007, Genesis
Microchip’s cash and cash equivalents and short-term investments totaled
approximately $183 million. STMicroelectronics
will finance the acquisition using existing cash on its balance sheet.
The
acquisition has been approved by the Board of Directors of Genesis, which has
unanimously recommended that holders of Genesis Microchip’s common stock accept
the tender offer and approve the second-step merger. The tender offer, which
STMicroelectronics expects to commence no later than December 18, 2007, and
the
second-step merger, are both subject to customary conditions, including receipt
of regulatory approvals, and are expected to be completed in the first quarter
of 2008.
Through
this acquisition, STMicroelectronics expects to expand its leadership in the
$1.5 billion digital TV market, one of the fastest growing segments in consumer
semiconductors. Genesis Microchip will enhance STMicroelectronics’s
technological capabilities for the transition to fully digital solutions in
this
segment and strengthen its product and intellectual-property portfolio.
“STMicroelectronics
is a leader in digital consumer technologies, with a strong position in set-top
box compression and decompression technologies and “front end” processing
technologies in digital TV. Genesis is a leader in “back-end” image and video
processing and digital interconnect technologies,” said Philippe Lambinet,
Corporate Vice President and General Manager of STMicroelectronics’s Home
Entertainment & Displays Group. “The combined company will have the
products, technology, IP and expertise to offer best-in-class integrated DTV
processing solutions that our customers are increasingly demanding. We also
believe that the Genesis DisplayPort technology brings expanded opportunities
to
the PC and home entertainment markets.”
“This
combination represents an exciting opportunity for Genesis,” said Elias Antoun,
Genesis Microchip’s President and Chief Executive Officer. “Joining forces with
STMicroelectronics will put us in the best position to ensure that our products
and technologies remain at the forefront of our industry. Our innovative
technology, when combined with STMicroelectronics’s resources, silicon design
expertise and manufacturing capabilities can accelerate the delivery of the
next
generation of solutions for our digital television, flat-panel display and
DisplayPort customer base.”
On
closing, Genesis will become part of STMicroelectronics’s Home Entertainment
& Displays Group. Elias Antoun will join STMicroelectronics and will lead
STMicroelectronics’s television and display initiatives, reporting to Philippe
Lambinet.
Morgan
Stanley acted as exclusive financial advisor to STMicroelectronics and Shearman
& Sterling LLP acted as legal counsel. Goldman Sachs acted as exclusive
financial advisor to Genesis Microchip and Wilson Sonsini Goodrich & Rosati
Professional Corporation acted as legal counsel.
Conference
Call
A
conference call open to all interested parties regarding STMicroelectronics’s
acquisition of Genesis will take place on December 11, 2007, at 9 a.m. EST
/ 3
p.m. CET. To listen to the conference call via telephone, please call +1 877
317
6799 (US) or +44 (0) 20 7107 0611 (International). To listen via the Internet,
please visit http://investors.st.com. Playback of the conference call will
be
available through December 21, 2007.
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About
STMicroelectronics
STMicroelectronics
is a global leader in developing and delivering semiconductor solutions across
the spectrum of microelectronics applications. An unrivalled combination of
silicon and system expertise, manufacturing strength, Intellectual Property
(IP)
portfolio and strategic partners positions STMicroelectronics at the forefront
of System-on-Chip (SoC) technology and its products play a key role in enabling
today's convergence markets. STMicroelectronics's
shares are traded on the New York Stock Exchange, on Euronext Paris and on
the
Milan Stock Exchange. In 2006, the Company’s net revenues were $9.85 billion and
net earnings were $782 million. Further information on STMicroelectronics can
be
found at www.st.com.
About
Genesis
Genesis
Microchip Inc. is a leading provider of image and video processing systems
enabling superior picture quality in flat-panel TVs and a variety of consumer
and PC-display products. Featuring Genesis Display Perfection(R) technologies
and Emmy award-winning Faroudja(R) video technologies, Genesis system-on-a-chip
solutions are used worldwide by display manufacturers to produce visibly better
images across a broad array of devices including flat-panel displays, digital
TVs, projectors, A/V receivers and DVD players/recorders. Genesis is also the
primary driver of the DisplayPort digital interface standard which enables
a
common, royalty free, scalable interface between any flat panel display and
video or data source. In addition to DisplayPort technology, the Genesis
technology portfolio features analog and mixed signal system-on-a-chip design,
DCDi(R) by Faroudja deinterlacing, TrueLife(TM) video enhancement,
IntelliComb(TM) video decoding and includes over 210 patents. Founded in 1987,
Genesis supports its leading brand-name customers with offices in the U.S.,
Canada, India, Taiwan, South Korea, China, Japan and Singapore, including LG,
Toshiba and Samsung. For more information about Genesis Microchip Inc. or
Genesis Display Perfection technologies, please visit www.gnss.com.
IMPORTANT
INFORMATION
The
tender offer described herein has not commenced. This announcement and the
description contained herein are provided for informational purposes only and
are neither an offer to purchase nor a solicitation of an offer to sell any
securities of Genesis Microchip Inc. Any offers to purchase or solicitations
of
offers to sell will be made only pursuant to the Tender Offer Statement on
Schedule TO (including the offer to purchase, the letter of transmittal and
other documents relating to the tender offer) which will be filed with
the
U.S.
Securities
and Exchange Commission (“SEC”) by Sophia Acquisition Corp., a wholly owned
subsidiary of STMicroelectronics. In addition, Genesis Microchip Inc. will
file
with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Tender Offer. Genesis Microchip’s shareholders are advised to
read these documents and any other documents relating to the tender offer that
are filed with the SEC carefully and in their entirety because they contain
important information.
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Genesis
Microchip Inc.’s shareholders may obtain copies of these documents (when they
become available) for free at the SEC's website at www.sec.gov or from
STMicroelectronics Investor Relations Department, 780 Third Ave, 9th
Floor,
New York, NY 10017.
Cautionary
statement regarding forward-looking statements
Some
of
the statements contained in this release that are not historical facts are
statements of future expectations and other forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933 or Section 21E of
the
Securities Exchange Act of 1934, each as amended) based on STMicroelectronics’s
management’s current views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or events to
differ materially from those in such statements due to, among other factors:
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future
developments of the world semiconductor market, in particular the
future
demand for semiconductor products in the key application markets
and from
key customers served by STMicroelectronics’s products;
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pricing
pressures, losses or curtailments of purchases from key customers
all of
which are highly variable and difficult to predict;
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the
financial impact of obsolete or excess inventories if actual demand
differs from STMicroelectronics’s anticipations;
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the
impact of intellectual property claims by STMicroelectronics’s competitors
or other third parties, and STMicroelectronics’s ability to obtain
required licenses on reasonable terms and conditions;
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changes
in the exchange rates between the US dollar and the Euro and between
the
U.S. dollar and the currencies of the other major countries in which
STMicroelectronics has operating infrastructure;
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STMicroelectronics’s
ability to manage in an intensely competitive and cyclical industry,
where
a high percentage of its costs are fixed and difficult to reduce
in the
short term, including its ability to adequately utilize and operate
its
manufacturing facilities at sufficient levels to cover fixed operating
costs;
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STMicroelectronics’s
ability to close, as currently planned and scheduled, its agreement
with
Intel and Francisco Partners concerning the creation of a new independent
Flash memory company to be named “Numonyx” if the financial, business or
other conditions to Closing as contractually provided are not met;
and the
estimated loss of $857 million posted so far, in relation to its
Flash
memory business, may materially change at Closing as a result of
developments in the Flash memory business;
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STMicroelectronics’s
ability in an intensively competitive environment, to secure customer
acceptance and to achieve its pricing expectations for high-volume
supplies of new products in whose development STMicroelectronics
has been,
or is currently, investing;
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the
attainment of anticipated benefits of research and development alliances
and cooperative activities, as well as the uncertainties concerning
the
modalities, conditions and financial impact beyond 2007 of future
R&D
activities in Crolles2;
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the
ability of STMicroelectronics’s suppliers to meet its demands for supplies
and materials and to offer competitive pricing;
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significant
differences in the gross margins STMicroelectronics achieves compared
to
expectations, based on changes in revenue levels, product mix and
pricing,
capacity utilization, variations in inventory valuation, excess or
obsolete inventory, manufacturing yields, changes in unit costs,
impairments of long-lived assets (including manufacturing, assembly/test
and intangible assets) and the timing and execution of
STMicroelectronics’s manufacturing investment plans and associated costs,
including start-up costs;
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changes
in the economic, social or political environment, including military
conflict and/or terrorist activities, as well as natural events such
as
severe weather, health risks, epidemics or earthquakes in the countries
in
which STMicroelectronics, its key customers and its suppliers, operate;
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changes
in STMicroelectronics’s overall tax position as a result of changes in tax
laws or the outcome of tax audits, and its ability to accurately
estimate
tax credits, benefits, deductions and provisions and to realize deferred
tax assets;
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the
outcome of litigation;
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the
results of actions by STMicroelectronics’s competitors, including new
product offerings and its ability to react
thereto.
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the
timing and completion of an all cash tender offer for the outstanding
shares of Genesis,
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the
ability to complete the tender offer and subsequent merger on the
terms
contemplated, and
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the
anticipated impact of the acquisition on STMicroelectronics’s operations
and financial results.
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Such
forward-looking statements are subject to various risks and uncertainties,
which
may cause actual results and performance of STMicroelectronics’s business to
differ materially and adversely from the forward-looking statements. Certain
such forward-looking statements can be identified by the use of forward-looking
terminology such as “believes”, “may”, “will”, “should”, “would be” or
“anticipates” or similar expressions or the negative thereof or other variations
thereof, or by discussions of strategy, plans or intentions. Some of the risk
factors STMicroelectronics faces are set forth and are discussed in more detail
in “Item 3. Key Information—Risk Factors” included in STMicroelectronics’s
Annual Report on Form 20-F for the year ended December 31, 2006, as filed with
the SEC on March 14, 2007. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this release as anticipated,
believed or expected. STMicroelectronics does not intend, and does not assume
any obligation, to update any information or forward-looking statements set
forth in this release to reflect subsequent events or
circumstances.
Unfavorable
changes in the above or other factors listed under “Risk Factors” from time to
time in STMicroelectronics’s SEC filings, including its Form 20-F, could have a
material adverse effect on STMicroelectronics’s results of operations or
financial condition.
For
further information please contact:
For
further information, please contact:
INVESTOR
RELATIONS:
Stanley
March
Group
Vice President, Investor Relations
Tel:
+1.212.821.89.39
Fax:
+1.212.821.89.23
stan.march@st.com
MEDIA
RELATIONS:
Maria
Grazia Prestini
Senior
Director, Corporate Media and Public Relations
STMicroelectronics
Tel:
+ 41
22 929 6945
mariagrazia.prestini@st.com
INVESTOR
AND MEDIA RELATIONS
Pamela
Goncalves
Sr.
Director of Investor and Corporate Communications
Genesis
Microchip Inc.
(408)
919-8539
Pamela.goncalves@gnss.com
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