Mentor Graphics Corp, which is waging a hostile $216m cash takeover bid for rival Quickturn Design Systems Inc, has now secured the financing necessary to complete the deal, if it can. The company announced that it has secured a definitive $200m line of credit with Bank of America, in accordance with a letter of commitment signed by the bank back in August. Mentor’s tender offer to purchase all the outstanding shares of Quickturn for $12.125 a piece is set to expire on November 30, unless extended again. Funds from the line of credit, together with working capital, will be used to pay for shares purchased pursuant to the tender offer, Mentor says. It claimed last week to have already been tendered enough shares – when added to the 3.3% stake it already owns – to give it majority control of its intended prey. Mentor has yet to purchase any of the shares tendered as it waits for the outcome of litigation in a Delaware court which could possibly still see the takeover bid ruled illegal. The two companies are also involved in an ongoing patent infringement suit in California. In announcing the line of credit, Mentor couldn’t resist the opportunity to voice its opinion that Quickturn’s recent order from a Japanese customer for an older- generation product doesn’t represent any significant resurgence of the Asian market for Quickturn’s business, nor market acceptance of Quickturn’s new products. Mentor has stated in the past that it wants Quickturn for its infrastructure and personnel, more so than its products, which the company believes are inferior to its own.
