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COFES Blog
Aug
16
Written by:
Russ Henke
8/16/2008 6:16 AM
In the June 29, 2008 blog entry in this space, entitled, “Will the ‘Big 3’ EDA Vendors soon become the ‘Big 2’ ??”, we commented on the bid by Cadence to buy EDA rival Mentor Graphics. See http://cofes.com/Community/Blogs/tabid/272/EntryID/142/Default.aspx
Well, it looks like the ‘Big 3’ will be around, at least for awhile.
On August 15, 2008, Cadence finally grew tired of the effort and called off its $16 per share ($1.6 billion) bid to acquire Mentor.
Shareholders immediately expressed their opinions of this news. Shares of Cadence surged 7% during the August 15 trading session to close at $7.64 a share, while shares of Mentor tanked, falling 26% to close at $10.33.
From the June 29 blog entry, readers will recall that Mentor had immediately rebuffed Cadence’s original $16 a share offer. In any case, industry insiders say that since then, Cadence was having trouble obtaining reasonable funding terms for the more than $1.1 billion needed to do the deal, a task made more troublesome after Cadence lowered its 2008 year-end guidance in late July 2008. "Although we achieved our second-quarter numbers, it was more difficult than we planned,” CEO Mike Fister said.
So the Big 3 EDA Vendors will remain the Big 3 the time being. However, the entire EDA Industry is under a lot of pressure these days, and some form of consolidation and or restructuring will likely occur sooner rather than later.
Stay tuned!
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