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CSR Now Agrees To Buy Zoran For Slashed Price – Update

19/06/2011

British chipmaker CSR Plc (CSR.L: News,CSRXF.PK: News ) and the U.S.-

based imaging and video technology company Zoran Corp. (ZRAN: News ) Friday announced

that the boards of the companies have approved amendments to the terms of their

merger originally announced in February this year. The revised offer by CSR now

values Zoran at about $484 million, down from the earlier valuation of $679 million.

Since the announcement of the transaction on February 21, several developments have

impacted the near-term outlook of Zoran, and this necessitated the amendment, the

companies said.

Shareholders of Zoran will now receive $6.26 in cash and 0.589 shares of CSR in the

form of American Depositary Shares for each share of Zoran stock held.

As at close on June 16, this represents a value of $9.19 per share of Zoran stock or

a total consideration of about $484 million. The original February offer (1.85

ordinary shares of CSR in the form of ADS for each Zoran share) valued Zoran at about

$679 million.

Net of Zoran's cash balance of $251 million as at March 31, 2011, the transaction

value implies an enterprise value of $233 million. As per the original merger terms,

the deal value implied an enterprise value of $418 million.

On completion of the deal, Zoran shareholders will own nearly 16.5 percent of the

combined group on a fully diluted basis as of June 16, 2011. CSR and Zoran remain

convinced of the strong strategic rationale of the deal and expect that the

combination will strengthen CSR's core business by adding imaging and video

capabilities within its existing end markets.

The deal is expected to provide more than 15 percent earnings per share accretion in

2012 before any incremental revenue synergies and one-off costs.

The cash consideration of $313 million will be satisfied from the combined group's

existing cash resources. Completion of the deal is expected in the third quarter of

2011.

CSR stated that its Chairman, CEO and CFO will lead the combined group. Levy

Gerzberg, Co-Founder, President, CEO and Director of Zoran will be joining the CSR

board as a Non-Executive Director.

Joep van Beurden, CSR's Chief Executive commented,”I am also pleased to report that

our second quarter business is trading in line with previous guidance released on the

10 May 2011 for second quarter revenues of $185 million – $200 million and we can now

update our guidance for second quarter revenues of $190 million – $195 million.”

Zoran also confirmed its previously announced guidance for second quarter revenues of

$80- $85 million.

CSR added that it will no longer proceed with its on-market share buyback programme

announced on February 21, as part of the original transaction.

from : RTTNews 

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