Finisar raps Infineon over aborted fiber deal
Finisar, the US company that was set to acquire the fiber-optic business belonging to Infineon Technologies, has denied that it was planning not to recommend the deal to its shareholders.
Munich-based Infineon pulled the plug on the acquisition on January 11. Infineon added that it had been advised by Finisar that the US company's board would likely withdraw its recommendation in favor of the deal to Finisar shareholders; something that Finisar denies:
"Infineon's notice alleges that the purported termination was based on Finisar's breach of the agreement," the Sunnyvale, CA, company said in a statement. "No such breach has taken place."
Finisar claims to have told Infineon that its board was merely in the process of deciding whether or not it would recommend the deal "in light of a number of recent adverse developments" at the German company's fiber-optics business.
This re-examination was in compliance with the terms of the amended purchase agreement signed on October 11 last year, it added.
In response to Infineon's claim that it would seek to recover damages incurred in the nine months since the aborted transaction was first announced, Finisar said that it would defend itself "vigorously" and possibly make its own damages claim against Infineon.
When first struck in April 2004, the acquisition was valued at $263 million, equivalent to 135 million Finisar shares. In October, the value of the deal was revised down to 110 million Finisar shares after a disappointing performance by the unit. The revised deal would have been worth around $200 million.
After calling off the transaction, Infineon says that its priority is to restructure the business unit, which includes a III-V chip manufacturing facility in Perlach. Extensive lay-offs appear likely.
