Silicon Motion terminated the merger agreement with MaxLinear
Last month, MaxLinear declared its decision to exercise its contractual rights to abandon the acquisition of Silicon Motion. Subsequently, Silicon Motion issued a formal notification to MaxLinear, rebuffing their decision to dissolve the merger agreement. They asserted their intention to actively pursue remedial measures, reserving all rights as delineated in the agreement and other stipulations, including but not limited to the entitlement for substantial compensation for damages borne by MaxLinear.
Today, Silicon Motion proclaimed that they have dispatched a formal notification to MaxLinear, terminating the agreement and merger plans effective until May 5th, 2022.
In their statement, Silicon Motion elucidated its stance, contending that MaxLinear exhibited deliberate and significant breaches of the merger agreement, leading to the inability to consummate the transaction by August 7th, 2023. Silicon Motion retains all its contractual, legal, and other rights under the merger agreement and other provisions, inclusive but not limited to seeking compensation from MaxLinear for extensive financial damages caused by their violations of the merger agreement. They emphasized that the losses incurred due to MaxLinear’s negligence far outstrip the termination fees stipulated in the merger agreement.
Additionally, Silicon Motion announced its intention to reinstate its annual dividend distribution policy upon the termination of the merger agreement, with the discretion vested in its board of directors. The erstwhile merger agreement had curtailed its ability to dispense any dividends. The exact amount and timing will hinge upon the discretionary authority and endorsement of the board and will be contingent upon whether such dividend distributions align with shareholders’ paramount interests, business visibility, operational outcomes, capital availability, forthcoming capital requirements, financial health, statutory mandates, and other factors the board deems pertinent.
