Electronjic chip maker CSR is pushing ahead with the takeover of digital entertainment and imaging solutions provider Zoran Corp but has reduced the value of its offer by a third after its US target revealed shock losses.
According to the Cambridge-based wireless technology company that specialises in Bluetooth chips, the deal announced in February would be completed, but the original bid would be discounted to the tune of $679 million.
CSR chief executive, Joep van Beurden, said the company was forced to renegotiate following a disastrous first-quarter trading update from the imaging specialist after the deal had been negotiated.
The update revealed that Zoran's losses had mounted from $4 million to $30.4 million after the company was affected by the earthquake and tsunami in Japan and news that Cisco was to shut down its Flip video camera line, a significant contract for the group.
The two companies initiated the talks in early 2010 to explore possibilities of a strategic partnership. However, they decided a merger would make more sense and agreed to a deal in February at $13.03 a share.
Following Zoran's results in May, the two sides returned to the table and agreed to what Van Beurden called a "very fair" deal, that valued Zoran at $484 million.