Mentor Graphics Corp, is going down the same road that Computer Associates International Inc took in its failed bid to acquire Computer Sciences Corp. The Wilsonville, Oregon electronic design software company said it intends to pursue its acquisition of Quickturn Design Systems Inc, despite that company’s rejection of its unsolicited $216m bid (CI No 3,481). Mentor said it would take all actions necessary to remove the obstacles to consideration of our offer. It has already backed up that statement by commencing litigation in an attempt to reverse changes in Quickturn’s by-laws which make it more difficult for the shareholders to speak out and effect change in the company’s directorial structure. The adjustments, made on Monday, constrict the dates for shareholder meetings and special elections of board members, according to Greg Hinckley, chief financial officer at Mentor. Another change in the by-laws states that new board members can’t remove the company’s poison pill takeover defense for at least six months after their appointment. Hinckley called the changes kind of obnoxious. Mentor asserted that even at this early stage in the game it has seen lots of interest in its tender offer among Quickturn shareholders and the company is not worried about failing in its bid like CA did. We expect to prevail, Hinckley said, adding that the company had made no provisions for losing the fight, despite the fact that the failed bid cost CA nearly $34m, which it wrote off as a one-time charge. Hinckley said the difference in its case is that CSC was a successful and growing company, whereas Quickturn has seen flat to declining revenue over the past three years. He added that Quickturn’s products were vastly inferior to Mentor’s and that the acquisition was being pursued to gain Quickturn’s infrastructure and personnel, more than anything else. The $12.125 per share tender offer is scheduled to expire at midnight, EST on September 9, although Mentor said it will extend the deadline if necessary and pursue the takeover as long as it takes to succeed.
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