Mobileye says Intel purchase of shares delayed again

Deadline for Intel Corp. to buy Mobileye shares now pushed to August 11 even as most requirements seem to have been met

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

A man walks under the Mobileye logo in Jerusalem, March 13, 2017. (Yonatan Sindel/Flash90)
A man walks under the Mobileye logo in Jerusalem, March 13, 2017. (Yonatan Sindel/Flash90)

Israeli automotive technology firm Mobileye said Monday that a deadline for Intel Corp. to acquire the firm’s shares, which was set to expire at the end of day New York time on July 28, has been delayed, for a third time, to August 11.

The company said it was still awaiting receipt of regulatory approval from the Korean Fair Trade Commission for the deal to go through. Mobileye also said the transaction is now expected to close during the third quarter of the year.

US giant Intel Corp. said in March that it agreed to buy Mobileye, a Jerusalem-based developer of advanced vision and driver assistance systems, for $15.3 billion, the largest ever purchase of an Israeli tech firm.

As part of the deal, Cyclops, a subsidiary of Intel, would put out a tender to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash. This tender was set to expire at 5 p.m. Eastern time on June 21, and was delayed to July 20 and then once again, to July 28. And now to Aug. 11.

According to a statement on Monday, as of the end of day July 28, some 78.63% of the outstanding Mobileye ordinary shares had been validly tendered following the tender offer, and an additional 12.21% of the outstanding Mobileye ordinary shares have been tendered pursuant to guaranteed delivery procedures.

Intel needs at least 67% of Mobileye’s outstanding shares to be validly tendered and not withdrawn at expiration of the tender offer.

“It looks like they received over 90% of Mobileye’s shares, exceeding the 67% threshold,” said Shirin Herzog, a senior partner and head of mergers and acquisitions at the Israeli law firm Ron Gazit, Rotenberg & Co., which is not involved in the deal. “Assuming shares are not withdrawn below the threshold, the report specifies only one condition to be met for the tender offer’s completion; receipt of regulatory approval from the Korean Fair Trade Commission.”

Looking ahead, Herzog said, if and when the tender offer is accepted, “there will be a subsequent offering period, allowing non-tendering shareholders to tender their Mobileye shares in exchange for the offer consideration.” After that, Mobileye is expected to undergo several changes, including delisting its shares from the New York Stock Exchange and transforming it into a private company, with restricted, and costly, share transferability, Herzog said.

“Intel and Mobileye are encouraging Mobileye’s non-tendering shareholders to tender their shares in the tender offer to avoid transfer restrictions and cost,” she said.

On June 13, shareholders held a meeting in Amsterdam where they approved the sale to Intel.

Mobileye develops sensors and artificial intelligence that allow a vehicle’s onboard computer to know where it is in relation to other vehicles, pedestrians and the surroundings, the key technologies needed for cars to eventually safely drive themselves.

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