MagnaChip [MX] :: buyout offers received
MagnaChip [MX] :: buyout offers received
Reports from South Korea say that MagnaChip received a letter of intent (LOI) from the LX Group to acquire the company. According to the article, the deal price is around $1.2 billion, or $26.50 per share. However, these buyout figures are likely to change in the weeks ahead. We expect a deal price between $25 - $30 per share to be announced soon. Once a deal is announced it will need to go through the regulatory approval process.
Several news outlets are suggesting that the LX Group's subsidiary, LX Semicon, would like to expand its offerings in the area of display driver IC's (DDICs) and silicon carbide (SiC)-based automotive power chips. Acquiring Maganachip would enable LX Semicon to add DDIC patents and manufacturing facilities to its existing portfolio.
This article provides details on the deal’s financing including participation by The Carlyle Group which would invest $300 million. According to reports, MagnaChip is fielding acquisition offers from other interested parties including Hahn & Co., Littelfuse, and NVC Partners.
In our most recent update on MagnaChip published on May 4th we said:
“A Letter Of Intent (LOI) to acquire MagnaChip could come any day from LX Group or another interested party. We continue to view shares of MagnaChip as attractive for purchase in the $18s (or lower) and we expect an eventual buyout offer will be announced at an acquisition price of $25/sh or more.”
As of today, MagnaChip has not confirmed any deal agreement. We think MagnaChip shares are likely to trade higher into the low-to-mid $20s when details of the rumored acquisition are confirmed by management and disclosed to investors in the coming weeks, if not sooner. We will post ongoing updates regarding this special situation as details emerge.
Below are our prior posts regarding the MagnaChip special situation:
May 4 2022
March 16 2022
January 7th 2022
December 21st 2021
December 16th 2021