Mentor Graphics Responds to Proposal from Cadence Design Systems

WILSONVILLE, Ore.—(BUSINESS WIRE)—June 17, 2008— Mentor Graphics Corporation (Nasdaq: MENT) today acknowledged receipt of an unsolicited proposal by Cadence Design Systems (Nasdaq: CDNS) to acquire Mentor Graphics at a price of $16.00 per share. Mentor Graphics confirmed that it previously rejected the proposal.

"As we recently indicated to Cadence, we reviewed Cadence's proposal and analyzed both the price proposed and the risks associated with obtaining antitrust approval for a combination between the companies, said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Following this review, we concluded that not only was the price insufficient to support a transaction but that the risks of not gaining regulatory approval were sufficiently high that the ability of the parties to consummate the transaction would be in jeopardy. For these and other reasons, our Board unanimously rejected the proposal."

About Mentor Graphics

Mentor Graphics Corporation (Nasdaq: MENT) is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the worlds most successful electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of over $850 million and employs approximately 4,200 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site:

Mentor Graphics is a trademark of Mentor Graphics Corporation. All other company or product names are the registered trademarks or trademarks of their respective owners.

Contact: Brunswick Group - New York Cindy Leggett-Flynn, 212-333-3810 or Brunswick Group - San Francisco Sabrina Guttman, 415-293-8475

Review Article
  • October 09, 2008
    Reviewed by 'Sanjay Gangal'
    I don't believe the merger is likely to go through. Cadence and Mentor have significant product overlap. Their customers are locked into specific product design flows and it is not easy to migrate these design flows to a new platform. So, Cadence will have to either continue to support the existing products for the foreseeable future or attempt to force customers to go through an expensive transition.
    Cadence is planning to take on significant debt ($1.1 Billion) to finance the takeover. This is reminiscent of the Daisy / Cadnetix merger when Daisy had taken on $200 Million debt to acquire Cadnetix and the debt payments ultimately doomed Daisy.
    Most importantly, markets spoke yesterday, driving down Cadence stock 6% -- so the Cadence stock holders saw $150 Million of their market cap disappear. If Cadence were to give up the pursuit of Mentor, Cadence stock holders are likely to see the stock come back up.

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  • October 09, 2008
    Reviewed by 'Daniel Payne'
    The EDA industry is better served by an independent Mentor instead of a merged Mentor. There simply is too much product overlap between Mentor and Cadence for this deal to make sense.

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