US semiconductor firm Advanced Energy has announced it’s no longer interested in XP Power after the London-listed firm rejected three proposals from the US firm.
Advanced Energy confirmed in a statement to markets that it “does not intend to make an offer on the shares”.
The firm’s bids for its rival turned heads in the City last month after the third and final approach was revealed to be at a 68 per cent premium to XP Power’s share price.
This valued the firm at £496m, having previously tabled bids worth £339m and £369m towards the end of last year.
The rejections came despite XP Power’s poor recent financial performance. It was forced to cancel its dividend in March after the firm, which specialises in making power controllers that transfer electricity from the grid to protect equipment from power surges, saw demand for semiconductors flatline after the pandemic boom.
In the second half of last year, the firm’s semiconductor revenue fell 22 per cent year on year.
Now, Advanced Energy has confirmed it will not table a formal offer, saying in a statement to markets: “Advanced Energy believes that the possible offer at 1,950p per share captured the potential of future market recovery while factoring in near and intermediate term market and operational risks facing XP Power as a standalone company.
“Advanced Energy further believes that an offer would have been an excellent opportunity for XP Power’s shareholders to realise an extraordinary premium, in cash, which would fully de-risk their investment.”
The confirmation puts an end to months of speculation as to whether the London Stock Exchange would lose yet another firm to a foreign rival.
This year, 75 companies have already left or are close to leaving the exchange.
Advanced Energy will now be prohibited from announcing an offer or possible offer for XP Power for six months.