Greenbackd

Farukh Farooqi, a long-time supporter of Greenbackd and the founder of Marquis Research, a special situations research and advisory firm (for more on Farukh and his methodology see The Deal in the article “Scavenger Hunter”) provided a guest post on Silicon Storage Technology, Inc (NASDAQ:SSTI) a few weeks back (see the post archive here). At the time of the post, SSTI was trading around $2.70. The stock is up 15.6% to close yesterday at $3.12.

SSTI has announced an amended merger, increasing the bid to $3.00 per share in cash. Here’s the announcement:

Silicon Storage Technology Announces Amended Merger Agreement with Microchip

SST Shareholders to Receive $3.00 Per Share in Cash

SUNNYVALE, Calif., Feb. 23 /PRNewswire-FirstCall/ — SST (Silicon Storage Technology, Inc.) (Nasdaq: SSTI), a leading memory and non-memory products provider for high-volume applications in the digital consumer, networking, wireless communications and Internet computing markets, today announced that it has entered into an amendment to its previously announced merger agreement with Microchip Technology Incorporated (Nasdaq: MCHP) (“Microchip”), a leading provider of microcontroller and analog semiconductors. Pursuant to the amendment, the purchase price for each share of SST common stock has been increased from $2.85 to $3.00 per share in cash. The amended termination fee payable in the circumstances and manner set forth in the merger agreement remains at 3.5% of the total equity consideration.

The amended agreement has been unanimously approved by SST’s Board of Directors acting upon the unanimous recommendation of its independent Strategic Committee. Microchip proposed the revised terms in response to a proposal received by the Strategic Committee from a private equity firm.

As previously announced, the Microchip transaction, which is expected to close in the second calendar quarter of 2010, is conditioned on approval of a majority of the outstanding shares of SST common stock as well as customary closing conditions. The transaction, which will be funded with cash on hand, is not subject to financing.

Houlihan Lokey is serving as the exclusive financial advisor to the Strategic Committee of the SST Board of Directors in connection with the transaction.

Shearman & Sterling LLP is serving as legal advisor to the Strategic Committee of the SST Board of Directors in connection with the transaction.

Cooley Godward Kronish LLP is serving as legal advisor to SST in connection with the transaction.

Wilson Sonsini Goodrich & Rosati, PC is serving as legal advisor to Microchip in connection with the transaction.

Says Farukh:

Subsequent to the MCHP $3/sh cash bid, Cerberus and SST Full Value Committee (actvist group) came up with a competing bid.

This competing bid is very interesting. It offers shareholders to either (1) take $3.00 per share in cash or (2) $2.62 in cash (via a special dividend) and an equity stub, thus giving shareholders the ability to participate in future upside.

I am in the process of valuing the stub but just wanted to make you aware of the development.

This is getting really interesting in that we now have two competing bids and it remains to be seen how, if at all, MCHP counters.

[Full Disclosure: I do not hold SSTI. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]