Quickturn Loses Fight Vs. Takeover
PORTLAND, Ore. (AP) _ Mentor Graphics Corp. can go ahead with its $216 million hostile takeover of Quickturn Design Systems Inc. after a Delaware judge yesterday blocked Quickturn from using its variation of a takeover defense called the ``dead-hand poison pill.″
Delaware Chancery Court Judge Jack Jacobs ruled that Quickturn executives acted unreasonably by enacting anti-takeover defenses designed to delay Mentor’s acquisition for at least nine months.
The main defense was the so-called ``dead-hand″ requirement, a controversial poison-pill measure that barred newly elected directors from deactivating takeover defenses for an initial six-month period.
``The board has not carried its burden of demonstrating that the (pill) is reasonable in relation to the perceived threat,″ Jacobs wrote in his 69-page decision.
The judge upheld another of Quickturn’s takeover defenses, which allows for a three-month delay to any acquisition.
The rival software companies have been locked in a three-year legal battle over patent-infringement allegations and the takeover bid.
The ruling could have an impact on other corporate takeover cases because many U.S. companies are registered in Delaware, a state traditionally favored for its business laws. Nearly two-thirds of Fortune 500 companies are incorporated in Delaware.
Mentor, based in Wilsonville, was offering $12.12 1/2 a share for Quickturn, a San Jose, Calif.-based rival manufacturer of software that helps engineers design electronic products such as computer chips, personal computers and networking equipment.
Mentor general counsel Dean Freed said the Oregon company has 53 percent of the shares tendered for the buyout, and Mentor already owns 3 percent.
Freed said the company plans to go ahead with the remainder of the tender offer, although Jacob delayed a vote for the Mentor slate of directors until Jan. 8.
``At that time, we expect that board ... will support the merger and the prompt closing of this transaction before the end of January,″ Freed said.
Efforts to reach Quickturn officials were unsuccessful.