Fabless Bluetooth chip firm CSR, the second biggest chip design company in Cambridge, has rebuffed a takeover bid by customer and partner Microchip Technology.
The failed bid has trigged another round of CSR thinking about putting itself up for sale, and given its history of a roller-coaster share price, now might be a very good time to do so.
CSR was once the world’s biggest supplier of Bluetooth chips but as its customers' market shares declined – particularly Nokia's – its sales, share and stock market status sank.
The Financial Times reports that part of Microchip Technology’s interest would be down to the tax benefits of owning a business outside the US, and suggests that this would make CSR worth around $2.7bn.
CSR dominates the Bluetooth industry and has been a major contributor to the standards bodies. It looks likely that the latest CSR Mesh will be absorbed into the mix.
There is huge growth potential for CSR off the back of the trendy Internet of Things space, and the Google $3.2bn purchase of Nest has laid down a marker in that market sector.
CSR put out a press release saying: "JP Morgan has been appointed to look at a number of bids for CSR; an offer from Microchip has been rejected; and that under legal requirements Microchip has until September 25th to either make a revised offer or announce that it is no longer interested."
CSR’s shares have recently shot up by a massive 30 per cent on the Microchip Technology news.
While the jury is still out on wearables, CSR is well placed to capitalise on both the fashion and the utility of the Internet of Things space. It recently released an SDK for the CSRmesh which includes development boards and a USB programmer. The SDK comes with software that supports networked lighting applications, with updates for home automation and other IoT applications based on CSRmesh due later in the year. The kit costs $299.
It looks likely that CSR will be sold, albeit not necessarily to Microchip. ®