Memory chipmaker Spansion Inc. (SPSN), which last month agreed to acquire Saifun Semiconductors Ltd. (NYSE:SFUN), said Thursday it would beef up the cash its offering as part of the $368 million acquisition.
An additional $31.4 million will be added to the cash component of the deal, which amounts to an extra dollar for each Saifun share. That's a significant sweetener, although Spansion can afford it since it will get Saifun's roughly $140 million cash coffer once the deal closes.
Spansion president and CEO Bertrand Cambou said in a statement that the company feels "it appropriate in this environment that Saifun shareholders receive a higher cash distribution."
The "environment" he's referring to is the increasing competitiveness in the flash memory market and Spansion's resulting less-than-stellar performance. Since the deal was announced Oct. 8, the value of the chipmaker's shares have been almost halved. They traded at about $4.20 early afternoon Thursday.
The target's shareholders will still get 0.74 Spansion shares for each Saifun share, but that's worth a lot less now. With shareholders set to vote on the deal next week, Cambou and his board probably thought this was a perfect time for a little holiday cheer.