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Daniel Payne
(Unregistered)
10/09/08 03:15 PM
Mentor Graphics Responds to Proposal from Cadence Design Sys new Report this article as Inappropriate to us !!!Login to Reply

Mentor Graphics Responds to Proposal from Cadence Design Sys


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Daniel Payne
(Unregistered)
10/09/08 03:15 PM
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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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Sanjay Gangal
(Unregistered)
10/09/08 03:15 PM
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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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