Cash takeover deal could see a 75% jump in Scottish manufacturer’s share price
Struggling audio manufacturer Wolfson Microelectronics, which provides smartphone components for the likes of Samsung, could soon be taken over by Texas-based Cirrus Logic it was revealed today [29th April 2014].
The news, buried in an update on Wolfson’s Q1 results, reveals that the tiny Edinburgh-based manufacturer is recommending a cash purchase by Cirrus of its entire share capital, placing the value of Wolfson’s stock at 235 pence compared to its close in London last night of 134 pence. If the deal goes ahead, it would mean a 75 per cent uplift in Wolfson’s share price.
For some time Wolfson has been fighting to recover lost ground in the mobile phone market, having failed to react quickly enough to the change from 3G to 4G handsets. Its latest earnings confirm its dismal performance, with revenue for the quarter standing at $28.8 million compared to $48.1 million for Q1 2013.
Its underlying operating losses also grew to $4.5 million against £2.8 million for this this time last year.
But the company still insists 2014 should prove more promising as it makes the transition to 4G platforms, with directors recently securing a $25 million bank facility to support anticipated growth.
News of Wolfson’s impending take over by rival Cirrus – which specialises in analog, mixed-signal, and audio DSP integrated circuits – should send the Edinburgh firm’s shares soaring today when the London market reopens shortly.