If the acquisition of Zoran Corp. (Nasdaq: ZRAN) by Britain's CSR plc (LSE: CSR) fails, Zoran will pay a fine of $12-18 million, says Zoran in its expanded financial report for 2010, published yesterday. Zoran announced the acquisition of the company for $679 million in shares two weeks ago.
In the financial report, Zoran also mentioned the attempt by shareholder Ramius LLC to remake Zoran's board of directors. Zoran says that Ramius's instigations are liable to harm Zoran's business by diverting management's attention from business to the struggle, and by affecting the closing of the CSR deal. The struggle could also harm Zoran's ability to hire new employees and win new customers, and affect implementation of its strategic plan, which will harm the company's financial results. Finally, the struggle is liable to adversely affect Zoran's share price.
Most of Zoran's customers are Far Eastern consumer electronics manufacturers: 35% of customers are Chinese companies, 29% are Taiwanese, and 23% are Japanese. Zoran achieved double-digit revenue growth in Taiwan and Japan in 2010, which was offset by a 63% plunge in revenue from South Korea and 26% drop from China.
Today, Zoran confirmed that Ramius's success on Friday in ousting Zoran's chairman and two other directors, and submitting Ramius Partner managing director Jeffrey Smith and two other nominees to the board.
Zoran president and CEO Dr. Levy Gerzberg said, "We welcome the new directors to the Zoran board and look forward to working together on behalf of our stockholders. We would also like to thank our three departing board members for their many years of service and contribution to Zoran's success."
Zoran's share price fell a further 2.4% yesterday to $10.64, giving a market cap of $521 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2011
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