Mentor Graphics says Icahn offer not enough

BANGALORE, INDIA: Mentor Graphics Corp said a takeover proposal by its biggest shareholder, billionaire investor Carl Icahn, undervalues the company, and that it is not the time to put the chip-design software maker up for sale.

Icahn offered $1.73 billion for Mentor in February, and predicted that the $17 per share proposal would flush out higher bids for the company.

Mentor, through a spokesman, declined to say what its next move will be. "We have said what we needed to say in the press release and I am not going to speculate on what we do next," the spokesman said.

Icahn, who has a 14.35 percent stake in Mentor Graphics, did not return a telephone call seeking comment.

Despite saying that the company was not for sale, Mentor said it remains open to offers. Goldman, Sachs & Co is advising Mentor Graphics.

"Our share price has grown by more than 70 per cent over the last year, for a two-year aggregate growth of approximately 200 percent, significantly outperforming our peer group and the market," Chief Executive Walden Rhines said in a statement on Monday.

Wilsonville, Oregon-based  Mentor's shares have risen 10 percent since Feb. 8, when Icahn said the company should be put up for sale. They have risen 86 percent in the last one year.     Mentor, earlier this month, urged its shareholders to reject Icahn's nominees to its board.

Mentor said its rivals Synopsis Inc and Cadence Design Systems could be logical buyers, but any talk on a combination with them entails risks to its growth and the stability of its customer base. However, it did not say what those risks were.

Cadence had offered to buy Mentor Graphics in 2008.

Mentor's shares were up a percent at $15.26 on Monday on Nasdaq.