CSR confirms rumours, rejects approach from Microchip

CSR's stock gained over a third on Thursday after the wireless technology firm confirmed rumours that it had received a takeover offer.

The UK chipmaker said it had been approached by American semiconductor manufacturing group Microchip but that the price proposed by the Nasdaq-listed firm was too low.

"The price proposed by Microchip has been rejected and the board is considering its options for the company," CSR said.

Shares were up 36.6% at 785.5p by 13:01, valuing the firm at around £1.3bn.

The statement followed a Financial Times report that suggested CSR had received takeover offers from a number of rival semiconductor groups.

The paper cited sources as saying that the business could fetch a price of as much as $3bn. Wednesday's closing price was 575p, equal to a market capitalisation of £0.95bn ($1.57bn).

The company, formerly known as Cambridge Silicon Radio, makes components for devices that fall under the so-called 'internet of things' (IoT) umbrella, focusing on the voice and music, bluetooth, in-car infotainment, navigation and document imaging markets.

CSR has now given Microchip a so-called 'put up or shut up' deadline of 17:00 on 25 September to either make a firm intention for an offer or rule itself out.

Analysts at Liberum said in an email: "We have long held that CSR is the most likely take-out target under our coverage given its attractive end market exposure (smart cars, connected home, IoT), significant tax assets ($110m deferred tax asset) and low tax rate thereafter (20%).

"There is a wave of M&A in the semiconductor space and premiums are going higher."

BC