Investment firm extends offer to buy Transmeta
- 19 February, 2008 09:00
An investment firm has extended its unsolicited offer to buy the remaining shares in Transmeta, keeping Intel's former chip-making rival on its toes.
Riley Investment Management is offering US$15.50 per share in cash to buy out Transmeta, an offer similar to the one it made on January 30 which expired on Wednesday. The current offer is due to expire on February 28.
Riley Investment is a Transmeta shareholder, holding a 6.6 percent stake in the company.
Transmeta paid little heed and did not respond to the initial offer by the end of the two-week deadline, said Bryant Riley, managing member of Riley Investment Management, in a U.S. Securities and Exchange Commission filing.
"I do not understand how a Board which has overseen such heavy losses and actively participated in the continued decline of shareholder value, while, at the same time, personally benefiting financially, can react in this manner," wrote Riley in the filing. Riley has repeatedly questioned the unnecessary expenditure and strategic direction of the company.
In a January 31 derivative complaint filed in the Superior Court of the State of California, County of Santa Clara, Riley's investment firm accused Transmeta's management officials of mismanagement and asset waste.
In the complaint, Riley Investment accused defendants of paying an "outrageous, illegal and unconscionable bonus" of over $10 million to legal counsel John O'Hara Horsley for "simply settling" an intellectual property lawsuit against Intel, and granting President and CEO Lester Crudele and Chief Financial Officer Sujan Jain $1.2 million in cash bonuses in connection with the Intel settlement "in which they played no material part," according to court documents.
Intel last year settled a LongRun technology patent dispute with Transmeta for US$250 million.
Riley also questioned Transmeta management's commitment to LongRun2 and developing shareholder value from it, Riley wrote in an earlier SEC filing. LongRun2 technology helps processors become more power-efficient.
Transmeta did not return requests for comment.