A Holiday Gift for Saifun Shareholders

Memory chipmaker Spansion Inc. (SPSN), which last month agreed to acquire Saifun Semiconductors Ltd. (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.

See Oct. 8 story from Tech Confidential
See Oct. 30 story from The Deal newsweekly [$$]