China's Spreadtrum To Be Acquired By Tsinghua Unigroup For About $1.78 Bln

(RTTNews) - Chinese semiconductor provider Spreadtrum Communications, Inc. (SPRD) announced Friday that it has agreed to be acquired by Tsinghua Unigroup Ltd., for $31.00 per American Depositary Share, or $10.33 per Ordinary Share, which will value Spreadtrum's equity at about $1.78 billion on a fully diluted basis.

Spreadtrum shares are currently up about 14 percent in pre-market trading.

On June 21, Spreadtrum board had received a preliminary non-binding proposal from Tsinghua Unigroup to acquire Spreadtrum for $28.50 in cash per American Depositary Share.

Shanghai based Spreadtrum is engaged in design, development and marketing of mobile chipset platforms for smartphones with 2G to 4G wirelesss capabilities. The broadline chipset company has an employee base of more than 1500. It reported 2012 revenues of about $720 million.

Tsinghua Unigroup Ltd. is an operating subsidiary of Tsinghua Holdings Co. Ltd., a solely state-owned limited liability corporation funded by Tsinghua University in China. Tsinghua Holdings Co. Ltd. is the controlling shareholder of Tsinghua Unigroup. The other shareholder is Beijing Jiankun Investment Group Co. Ltd.

Unigroup's business lines include high-technology, bio-technology, science park development, and urban infrastructure construction.

Spreadtrum board has unanimously approved the merger agreement and recommended the company's shareholders vote to approve the merger agreement.

Spreadtrum noted that it expects to hold a special meeting of its shareholders to consider and act upon the proposed transaction as promptly as practicable.

"We believe Spreadtrum and Tsinghua Unigroup will supplement each other and create enormous synergies in China and abroad," said Zhao Weiguo, chairman and chief executive officer of Tsinghua Unigroup.

Morgan Stanley Asia Ltd., rendered a fairness opinion to the board of directors of Spreadtrum. Fenwick & West LLP is serving as legal advisor to Spreadtrum, and Morrison & Foerster LLP is serving as legal advisor to Tsinghua Unigroup.

SPRD closed Thursday's regular trading at $26.45 on the Nasdaq. In the pre-market activity, the shares are currently up 14.18 percent.