Cypress Semiconductor Corporation (NASDAQ:CY) announced that its President and Chief Executive Officer, T.J. Rodgers, sent the following letter to Jimmy S.M. Lee, Executive Chairman of the Board of Directors of Integrated Silicon Solution, Inc.


June 22, 2015

Jimmy S. M. Lee
Executive Chairman

Integrated Silicon Solution, Inc.
1623 Buckeye Drive
Milpitas, California 95035

Dear Jimmy,

I trust that the ISSI Board of Directors now understands that Cypress Semiconductor places strategic, not just financial, value on the acquisition of ISSI. Of course, you have known of this strong and unwavering interest, given your personal dialogues with us over the last year. As we said in those meetings, we believe that the transaction would benefit not only ISSI shareholders, but also ISSI customers due to the increased breadth and strategic capabilities of the product offerings of the combined companies; for example, to provide and warranty all the memory types (NOR Flash, SRAM, F-RAM and DRAM) needed to implement an automotive embedded system.

With that vision unchanged, Cypress is increasing its offer to acquire ISSI to $22.25 per share, while maintaining its previously outlined ticking fee of$0.10 per share per quarter beginning October 1, 2015. Additionally, Cypress will put into escrow through our lawyers today a merger agreement pre-negotiated with ISSI and signed by me to further demonstrate our sincerity and strong commitment to closing this transaction.

This Cypress proposal is clearly superior to an Uphill proposal at the same price per share, given our inclusion of a ticking fee and our mitigation of regulatory risk. We have gone to great lengths to systematically address ISSI’s concerns by 1) demonstrating committed financing, 2) eliminating regulatory risk by agreeing to possible ISSI SRAM divestitures, 3) adding a ticking fee to compensate for any unforeseen delay in closing, and 4) adding a reverse break-up fee.

Meanwhile, the Uphill Proposal is still plagued with significant governmental (CFIUS) timing and closing risks along with mandated Taiwan divestitures.

If Cypress had been included in your strategic review and sale process, your shareholders would have reaped two significant benefits: a more time-efficient price-discovery process and the capture of a potential incremental $0.56 per share, which was instead wasted on a break-up fee. In addition, the lengthy bidding process has also caused ISSI’s record date to become stale. We believe it should be updated. Your recent tactic of adjourning and reconvening your shareholder meeting preserves the old record date but puts a meaningful portion of the voting in the hands of investors who no longer hold ISSI’s stock.

We are simultaneously releasing this letter to the public. Our offer is now subject only to your countersigning the escrowed merger agreement.


T.J. Rodgers
President and Chief Executive Officer (Original Source)

Shares of Cypress Semiconductor closed last Friday at $12.68 . CY has a 1-year high of $16.25 and a 1-year low of $8.04. The stock’s 50-day moving average is $13.14 and its 200-day moving average is $13.99.

On the ratings front, Cypress Semiconductor has been the subject of a number of recent research reports. In a report issued on June 11, Wedbush analyst Betsy Van Hees reiterated a Buy rating on CY, with a price target of $17, which implies an upside of 34.1% from current levels. Separately, on June 1, Needham’s Rajvindra Gill maintained a Buy rating on the stock and has a price target of $20.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Betsy Van Hees and Rajvindra Gill have a total average return of 17.9% and 24.9% respectively. Hees has a success rate of 58.5% and is ranked #246 out of 3638 analysts, while Gill has a success rate of 65.5% and is ranked #28.

Cypress Semiconductor Corp with its subsidiaries, designs, develops, manufactures and markets high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and system value.