Wolfson Microelectronics, the UK semiconductor company, is to be acquired by American rival Cirrus Logic, in a takeover that will fuel the debate over the loss of British technology champions in cross-border deals.
Cirrus' all-cash deal implies an enterprise value of £278m, including debt, for the Edinburgh-based audio chipmaker, with shareholders in Wolfson set to receive 235p per share - a 75 per cent premium to the closing share price of 134p on Monday.
Wolfson shares leapt 75 per cent on news of the bid, and closed 0.5p below the offer price, at 234.5p, on Tuesday.
Nasdaq-listed Cirrus, which supplies audio chips for Apple devices, has a market capitalisation of about $1.4bn, far in excess of Wolfson's £165.5m, as of Monday's close.
But analysts said the companies could have been of similar size had Wolfson not been dropped as a supplier to the iPhone in 2008. At its peak in 2006, Wolfson's share price was 556p, giving it a market capitalisation of £631m. But the company, which had provided audio chips for the iPod and the first iPhones, had its contract to supply parts for the iPhone 3GS cancelled after problems with late shipments.
Wolfson, which was founded in 1984 as a spinout from Edinburgh university, has since been consistently overshadowed by Cambridge chipmaker Arm Holdings. While Arm makes the main processors for smartphones, Wolfson's niche audio semiconductors have left it dependent on a small group of big customers.
In February, Wolfson - which employs 420 staff worldwide - reported a fifth consecutive year of annual operating losses. Revenues were flat at $179m.
Cirrus will gain access to Wolfson's 525 patents, as well as the R&D expertise behind its audio hub product - which processes the audio functions of smartphones, tablets and cameras - and its silicone-based microphones, which are used in the Samsung's new Galaxy S5.
The deal comes amid political concern over the loss of British technology and research expertise, following the move by US pharmaceuticals company Pfizer moves to acquire AstraZeneca - which would be the largest foreign takeover of a UK company.
Richard Holway, chairman of UK research group TechMarketView, said the deal for Wolfson was a "huge shame" for the tech scene in the UK.
"The real problem with this is, what we clearly need in this country - and this is particularly true of tech - is companies that do not sell out at the very early stages; that they go on to become the Googles and Facebooks of tomorrow, but stay in the UK," he said.
Michael Ruettgers, chairman of Wolfson, said: "Together with Cirrus Logic, we believe this will create a powerful platform for future growth, above and beyond our standalone potential."
Jason Rhode, Cirrus chief executive, said the deal would help the Texan group "differentiate our products with software" and add products such as Mems microphones to its portfolio.
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