SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation
Statement under Section 14(d)(4) of the
Securities
Exchange Act of 1934
Genesis
Microchip Inc.
(Name
of Subject Company)
Genesis
Microchip Inc.
(Name
of Person(s) Filing Statement)
Common
Stock, par value $0.001 per share
(Title
of Class of Securities)
37184C103
(CUSIP
Number of Class of Securities)
Elias Antoun
President
and Chief Executive Officer
Genesis
Microchip Inc.
2525
Augustine Drive
Santa
Clara, CA 95054
(408)
919-8400
(Name,
address and telephone number of person
authorized
to receive notices and communications on
behalf
of the person(s) filing statement)
With
copies to:
|
Bradley
L. Finkelstein, Esq.
|
|
|
Wilson
Sonsini Goodrich & Rosati
|
Wilson
Sonsini Goodrich & Rosati
|
|
Professional
Corporation
|
Professional
Corporation
|
|
1301
Avenue of the Americas, 40th Floor
|
650
Page Mill Road
|
|
New
York, New York 10019
|
Palo
Alto, CA 94301
|
|
(212)
999-5800
|
(650)
493-6811
|
x
Check
the box if
the filing relates solely to preliminary communications made before the
commencement of a tender offer.
STMicroelectronics
to Acquire
Genesis Microchip:
A Leading Supplier of Display Image Processors
Genesis Microchip:
A Leading Supplier of Display Image Processors
Important
Information
The
tender offer
described herein has not commenced. This announcement and the
description contained herein are provided for informational purposes only and are
neither an offer to purchase nor a solicitation of an offer to sell any securities of
Genesis Microchip Inc. Any offers to purchase or solicitations of offers to sell will be
made only pursuant to the Tender Offer Statement on Schedule TO (including the
offer to purchase, the letter of transmittal and other documents relating to the tender
offer) which will be filed with the U.S. Securities and Exchange Commission (“SEC”)
by Sophia Acquisition Corp., a wholly owned subsidiary of STMicroelectronics. In
addition, Genesis Microchip Inc. will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Tender Offer. Genesis Microchip’s
shareholders are advised to read these documents and any other documents relating
to the tender offer that are filed with the SEC carefully and in their entirety because
they contain important information.
description contained herein are provided for informational purposes only and are
neither an offer to purchase nor a solicitation of an offer to sell any securities of
Genesis Microchip Inc. Any offers to purchase or solicitations of offers to sell will be
made only pursuant to the Tender Offer Statement on Schedule TO (including the
offer to purchase, the letter of transmittal and other documents relating to the tender
offer) which will be filed with the U.S. Securities and Exchange Commission (“SEC”)
by Sophia Acquisition Corp., a wholly owned subsidiary of STMicroelectronics. In
addition, Genesis Microchip Inc. will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Tender Offer. Genesis Microchip’s
shareholders are advised to read these documents and any other documents relating
to the tender offer that are filed with the SEC carefully and in their entirety because
they contain important information.
Genesis
Microchip
Inc.’s shareholders may obtain copies of these documents (when
they become available) for free at the SEC's website at www.sec.gov or from
STMicroelectronics Investor Relations Department, 780 Third Ave, 9th Floor, New
York, NY 10017.
they become available) for free at the SEC's website at www.sec.gov or from
STMicroelectronics Investor Relations Department, 780 Third Ave, 9th Floor, New
York, NY 10017.
2
Agenda
Highlights
of the Transaction
Genesis
Overview
Timetable
3
STMicroelectronics
to Acquire Genesis Microchip
Genesis
is a
leading global supplier of Display Image Processors
with annual sales of approximately $200 MM
with annual sales of approximately $200 MM
All-cash
offer of $8.65 per share implying a total equity value of
approximately $336 MM
approximately $336 MM
Premium
of 60% to Geneva’s closing stock price on December 10, 2007
and 26% to the proceeding 60 day average stock price
and 26% to the proceeding 60 day average stock price
As
of September 30,
2007, Geneva had a net cash position of $183 million
Achieves
ST’s strategy to become a leader in DTV, the fastest
growth market segment in consumer semiconductors
growth market segment in consumer semiconductors
Synergies
from sales leverage, scale, cost savings and best in
class R&D capabilities
class R&D capabilities
Acquisition
expected to close in Q1 2008
4
Strategic
Rationale
Combining
two leading technologies (image quality and image
coding) enables ST to be at the forefront of the integration and
convergence trends that are reshaping the marketplace
coding) enables ST to be at the forefront of the integration and
convergence trends that are reshaping the marketplace
Natural
strategic fit and combination of complementary
technologies
technologies
ST
is a leader in
digital consumer technologies, with a strong position in
set-top box compression and decompression technologies and “front
end” processing technologies in digital TV
set-top box compression and decompression technologies and “front
end” processing technologies in digital TV
Genesis
is a leader
in “back-end” image processing, video quality and
digital interconnect technologies
digital interconnect technologies
Combined
company will be able to offer best-in-class integrated
DTV processing solutions that our customers are increasingly
demanding
DTV processing solutions that our customers are increasingly
demanding
ST
to expand
technology capability in digital multimedia applications
5
Goals
for
Acquisition
Deliver
best
in class image quality in all integrated DTV solutions
Leverage
both companies’ expertise and engineering talent
Ensure
expanded market presence-both current and future
generation DTV solutions
generation DTV solutions
Exploit
technology
leadership: video processing chain 1080p120Hz
Look
for techno
proven on field at lower resolution (768p120 & scaler 1080p60)
Recognized
as a
reference on the market
Fast
execution
capability at platform level
One
chip MPEG2/4
with MCTi 10 bit design win
Competitive
product
cost (65-45 nm, limited IP licenses…)
Accelerate
the penetration of DisplayPort, an innovative
technology for display interconnect, into the consumer electronics
market by leveraging ST’s leading position in the set-top box market
technology for display interconnect, into the consumer electronics
market by leveraging ST’s leading position in the set-top box market
ST
to
strengthen its leadership position in the DTV market
6
Genesis
Microchip
Company
Highlights
Founded
as a
Canadian company in 1987, headquartered in
Santa Clara, California. A fabless company with 650 employees-
of which over half are R&D personnel
Santa Clara, California. A fabless company with 650 employees-
of which over half are R&D personnel
NASDAQ
listed company (“GNSS”) with a market capitalization
of approx $200 MM, LTM revenues of $191 MM, net cash
position of $183 MM
of approx $200 MM, LTM revenues of $191 MM, net cash
position of $183 MM
Design
centers in Santa Clara, Toronto, Bangalore and Taipei
210
US and
foreign patents
Leader
in
display image and video processors in flat-panel TV’s
LCD monitors and the primary driver of DisplayPort digital
interconnect standards
LCD monitors and the primary driver of DisplayPort digital
interconnect standards
Key
customers include LG, Toshiba, Samsung and Dell
7
Leader
in
Image Quality and Video Processing IP
Acquiring
a
“back-end” image processing company is of strategic importance and offers
significant benefits to DTV roll-out
significant benefits to DTV roll-out
Comprehensive
Product Portfolio
LCD
Monitor
Controllers
Flat
Panel TV
Controllers
Digital
TV
Controllers
DisplayPort
digital
interconnect IC’s
Tier
One
Customers for one chip DTV in 08-09
Strong
platform and system knowledge for flat panel displays
Proven
Leadership in customer support
Strong
management team
Excellent
knowledge
of the DTV market
Depth
of R&D
capabilities
Shared
vision with
ST on future requirements of DTV product offerings
Genesis
Attributes
8
The
company’s major customers include LG Electronics,
Toshiba, Samsung and Dell
Toshiba, Samsung and Dell
Top
five
customers accounted for 52% of the total revenues for
fiscal year 2007
fiscal year 2007
Blue
Chip Customer
Base
Source
Company
information,
broker research
Flat
Panel
Computer Monitors
Television
& Video
Source
Company
information,
broker research
9
Expected
Timetable
Expected
Date
December
11, 2007
December
18, 2007
December
20, 2007
Q1
2008
Milestone
Announcement
Filing
of tender
offer
HSR
filing and
review
Closure
of tender
offer
10
Q&A
Some
of the
statements contained in this presentation that are not historical facts are
statements of future expectations and other forward-looking statements (within
the meaning of
Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) based on STMicroelectronics’s management’s current views and
assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements due to,
among other factors:
Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) based on STMicroelectronics’s management’s current views and
assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements due to,
among other factors:
future
developments of the world semiconductor market, in particular the future
demand
for semiconductor products in the key application markets and from key customers
served by
STMicroelectronics’s products; pricing pressures, losses or curtailments of purchases from key customers all of which are highly variable and difficult to predict; the financial impact
of obsolete or excess inventories if actual demand differs from STMicroelectronics’s anticipations; the impact of intellectual property claims by STMicroelectronics’s competitors or
other third parties, and STMicroelectronics’s ability to obtain required licenses on reasonable terms and conditions; changes in the exchange rates between the US dollar and the Euro,
and the currencies of the other major countries in which STMicroelectronics has operating infrastructure; STMicroelectronics’s ability to manage in an intensely competitive and
cyclical industry, where a high percentage of its costs are fixed and difficult to reduce in the short term, including its ability to adequately utilize and operate its manufacturing facilities
at sufficient levels to cover fixed operating costs; STMicroelectronics’s ability to close, as currently planned and scheduled, its agreement with Intel and Francisco Partners concerning
the creation of a new independent Flash memory company to be named “Numonyx” if the financial, business or other conditions to Closing as contractually provided are not met; and
the estimated loss of $857 million posted so far, in relation to its Flash memory business, may materially change at Closing as a result of developments in the Flash memory business;
STMicroelectronics’s ability in an intensively competitive environment, to secure customer acceptance and to achieve its pricing expectations for high-volume supplies of new
products in whose development STMicroelectronics has been, or is currently, investing; the attainment of anticipated benefits of research and development alliances and cooperative
activities, as well as the uncertainties concerning the modalities, conditions and financial impact beyond 2007 of future R&D activities in Crolles2; the ability of STMicroelectronics’s
suppliers to meet its demands for supplies and materials and to offer competitive pricing; significant differences in the gross margins STMicroelectronics achieves compared to
expectations, based on changes in revenue levels, product mix and pricing, capacity utilization, variations in inventory valuation, excess or obsolete inventory, manufacturing yields,
changes in unit costs, impairments of long-lived assets (including manufacturing, assembly/test and intangible assets) and the timing and execution of STMicroelectronics’s
manufacturing investment plans and associated costs, including start-up costs; changes in the economic, social or political environment, including military conflict and/or terrorist
activities, as well as natural events such as severe weather, health risks, epidemics or earthquakes in the countries in which STMicroelectronics, its key customers and its suppliers,
operate; changes in STMicroelectronics’s overall tax position as a result of changes in tax laws or the outcome of tax audits, and its ability to accurately estimate tax credits, benefits,
deductions and provisions and to realize deferred tax assets; the outcome of litigation; the results of actions by STMicroelectronics’s competitors, including new product offerings
and its ability to react thereto. the timing and completion of an all cash tender offer for the outstanding shares of Genesis, the ability to complete the tender offer and subsequent
merger on the terms contemplated, and the anticipated impact of the acquisition on STMicroelectronics’s operations and financial results.
STMicroelectronics’s products; pricing pressures, losses or curtailments of purchases from key customers all of which are highly variable and difficult to predict; the financial impact
of obsolete or excess inventories if actual demand differs from STMicroelectronics’s anticipations; the impact of intellectual property claims by STMicroelectronics’s competitors or
other third parties, and STMicroelectronics’s ability to obtain required licenses on reasonable terms and conditions; changes in the exchange rates between the US dollar and the Euro,
and the currencies of the other major countries in which STMicroelectronics has operating infrastructure; STMicroelectronics’s ability to manage in an intensely competitive and
cyclical industry, where a high percentage of its costs are fixed and difficult to reduce in the short term, including its ability to adequately utilize and operate its manufacturing facilities
at sufficient levels to cover fixed operating costs; STMicroelectronics’s ability to close, as currently planned and scheduled, its agreement with Intel and Francisco Partners concerning
the creation of a new independent Flash memory company to be named “Numonyx” if the financial, business or other conditions to Closing as contractually provided are not met; and
the estimated loss of $857 million posted so far, in relation to its Flash memory business, may materially change at Closing as a result of developments in the Flash memory business;
STMicroelectronics’s ability in an intensively competitive environment, to secure customer acceptance and to achieve its pricing expectations for high-volume supplies of new
products in whose development STMicroelectronics has been, or is currently, investing; the attainment of anticipated benefits of research and development alliances and cooperative
activities, as well as the uncertainties concerning the modalities, conditions and financial impact beyond 2007 of future R&D activities in Crolles2; the ability of STMicroelectronics’s
suppliers to meet its demands for supplies and materials and to offer competitive pricing; significant differences in the gross margins STMicroelectronics achieves compared to
expectations, based on changes in revenue levels, product mix and pricing, capacity utilization, variations in inventory valuation, excess or obsolete inventory, manufacturing yields,
changes in unit costs, impairments of long-lived assets (including manufacturing, assembly/test and intangible assets) and the timing and execution of STMicroelectronics’s
manufacturing investment plans and associated costs, including start-up costs; changes in the economic, social or political environment, including military conflict and/or terrorist
activities, as well as natural events such as severe weather, health risks, epidemics or earthquakes in the countries in which STMicroelectronics, its key customers and its suppliers,
operate; changes in STMicroelectronics’s overall tax position as a result of changes in tax laws or the outcome of tax audits, and its ability to accurately estimate tax credits, benefits,
deductions and provisions and to realize deferred tax assets; the outcome of litigation; the results of actions by STMicroelectronics’s competitors, including new product offerings
and its ability to react thereto. the timing and completion of an all cash tender offer for the outstanding shares of Genesis, the ability to complete the tender offer and subsequent
merger on the terms contemplated, and the anticipated impact of the acquisition on STMicroelectronics’s operations and financial results.
Such
forward-looking statements are subject to various risks and uncertainties,
which
may cause actual results and performance of STMicroelectronics’s business to
differ materially
and adversely from the forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “may”,
“will”, “should”, “would be” or “anticipates” or similar expressions or the negative thereof or other variations thereof, or by discussions of strategy, plans or intentions. Some of the
risk factors STMicroelectronics faces are set forth and are discussed in more detail in “Item 3. Key Information—Risk Factors” included in STMicroelectronics’s Annual Report on Form
20-F for the year ended December 31, 2006, as filed with the SEC on March 14, 2007. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described in this release as anticipated, believed or expected. STMicroelectronics does not intend, and does not assume
any obligation, to update any information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.
and adversely from the forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “may”,
“will”, “should”, “would be” or “anticipates” or similar expressions or the negative thereof or other variations thereof, or by discussions of strategy, plans or intentions. Some of the
risk factors STMicroelectronics faces are set forth and are discussed in more detail in “Item 3. Key Information—Risk Factors” included in STMicroelectronics’s Annual Report on Form
20-F for the year ended December 31, 2006, as filed with the SEC on March 14, 2007. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described in this release as anticipated, believed or expected. STMicroelectronics does not intend, and does not assume
any obligation, to update any information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.
Unfavorable
changes in the above or other factors listed under “Risk Factors” from time to
time in STMicroelectronics’s SEC filings, including its Form 20-F, could have a
material
adverse effect on STMicroelectronics’s results of operations or financial condition.
adverse effect on STMicroelectronics’s results of operations or financial condition.
Forward
Looking Statements
12