Cadence Offers to Buy Mentor for $1.6 Billion

Cadence Design Systems Tuesday said it offered to buy rival software maker Mentor Graphics for $16 a share, in an unsolicited deal with an enterprise value of $1.6 billion.

Cadence , a maker of software for designing microchips, said the all-cash proposal represents a 30 percent premium over Monday's closing price for Mentor

, which supplies software used to design electronic circuitry.

"A combined Cadence-Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next-generation product development," Michael Fister, Cadence's chief executive, said in a statement.

Cadence said it has tried to launch talk with Mentor about the offer over the past two months, noting that on May 2, when it first delivered the proposal, the offer represented a 59 percent over Mentor's stock price.

According to a letter published by Cadence, Mentor rejected Cadence's advance on May 23, "without any substantive discussion with us or negotiation of our proposal."

Mentor's shares closed on Monday at $12.33 on Nasdaq, and it is up more than 43 percent over the past three months. Over the same period, Cadence shares are up 5.2 percent at $11.59 on Nasdaq.

Deutsche Bank Securities is acting as financial advisor to Cadence and Davis Polk & Wardwell is acting as legal counsel.

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