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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Section 240.14a-12
QUICKTURN DESIGN SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
MENTOR GRAPHICS CORPORATION
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MENTOR GRAPHICS URGES REJECTION OF QUICKTURN'S INTIMIDATION
TACTICS - CALLS THEM MISLEADING AND SELF-SERVING
-- MENTOR CHALLENGES CADENCE TO ALLOW BEST BID
TO WIN IN LIMITED DURATION AUCTION --
WILSONVILLE, OREGON, JANUARY 7, 1999 -- Mentor Graphics Corporation (Nasdaq:
MENT) stated today that it believes that the intimidation tactics being used by
the board and management of Quickturn Design Systems, Inc. (Nasdaq: QKTN)
against their own stockholders to protect their deal with Cadence Design
Systems, Inc. (NYSE: CDN), their preferred suitor, are misleading and
self-serving and should be rejected by Quickturn stockholders.
Mentor believes the choice for Quickturn stockholders is clear. Having been
found to have breached their fiduciary duties in adopting an illegal
anti-takeover entrenchment device and having been proved to have left money on
the table once already, the Quickturn directors have shown they cannot be
trusted to maximize values for Quickturn stockholders.
Mentor President and Chief Executive Officer Dr. Walden C. Rhines said: "Our
motives have been consistent from day one. Mentor's emulation business fits with
Quickturn's and offers synergies that cannot be even approached by any other
bidder -- especially Cadence."
Dr. Rhines emphasized: "We are not seeking to knock out the Cadence deal -- only
a fair opportunity to top it. We will not take any action to prevent the Cadence
deal from meeting the conditions for a pooling-of-interests transaction, if it
currently would otherwise qualify.
"We will continue to seek to invalidate the egregious break-up fees, lock-up
options and no-shop provisions in the Cadence merger agreement to enable the
newly elected board to freely conduct an auction of Quickturn to the highest
bidder. Until there is a judicial determination that these provisions are
invalid, in whole or in part, we will not request that the new board permit us
to conduct due diligence unless we have made a clearly superior proposal."
Mentor believes that should the Delaware court invalidate the provisions of the
no-shop condition restricting the Quickturn board's ability to permit Mentor to
conduct due diligence (and likewise invalidate the other offensive Cadence
merger provisions), thereby providing a level playing field for the two
announced
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bidders, Mentor would be able to determine promptly if it is prepared to make a
superior proposal.
Dr. Rhines also challenged Cadence to participate in an immediate auction,
stating: "Mentor is prepared to bring this matter to a quick resolution and let
the highest bid win. Mentor proposes that our third-party advisors (who will
sign a confidentiality agreement protecting Quickturn from its unjustified
concerns about sharing such information with its `fiercest competitor')
undertake appropriate due diligence of limited duration. The Quickturn board
could then fulfill its fiduciary duties and let the highest bid win. With no
limitation on the amount of stock it can pay, why is Cadence afraid of a prompt
auction?"
Dr. Rhines concluded: "Quickturn stockholders have only one good choice to
maximize value. They should vote the gold-striped proxy to elect an independent
board of directors who may be able to get stockholders a higher offer in an
auction following judicial relief from the incumbent board's egregious merger
agreement provisions. Stockholders have nothing to lose, since Mentor will take
no action to give Cadence a right to walk from their binding contract with
Quickturn unless we put a superior proposal on the table."
Mentor repeated that it fully recognizes the critical importance of being
successful in invalidating the provisions of the Cadence agreement in the
Delaware courts. To maximize values for Quickturn stockholders, the new board
cannot be bound by these provisions, particularly the no-shop provision that
would trigger the payment of break-up fees that severely limit the board's
ability to permit Mentor to perform due diligence to see if Quickturn is worth
more than $15.00 per share. Following a favorable ruling in the litigation,
Mentor believes that the new board would then have the best opportunity to
conduct an auction to maximize the sale price for the benefit of all Quickturn
stockholders. Mentor understands that it must be ready to consider increasing
its offer price and the price to be paid per share in a negotiated merger
transaction if it is successful in the litigation and if due diligence
demonstrates greater value of Quickturn to Mentor.
Mentor said that Quickturn's and Cadence's criticism of Mentor's transaction
structure and financing status is self-serving. Both companies know full well
that the only reason for the back-end merger structure rather than a tender
offer for 100% of the company is Cadence's 19.9% lock-up option and Synopsys's
warrants (which together equate to 4,619,100 shares). Moreover, Mentor will
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commit to drop its bid, if it is not once again able to have its banks confirm
within ten business days that the funds to be provided under its credit
agreement are available for its $15.00 back-end negotiated merger. Mentor does
not believe Quickturn's and Cadence's criticisms of Mentor's financing abilities
is anything more than a red herring. As previously announced, Mentor's banks had
confirmed that under its existing arrangement all such funds were available to
finance the prior $14.00 merger proposal.
As announced yesterday, Mentor increased its tender offer for 2.1 million shares
to $15 and stated that it was prepared to acquire the balance of Quickturn in a
negotiated merger for the same price, subject to completion of satisfactory due
diligence and negotiation and execution of a definitive merger agreement.
Mentor's Offer to Purchase, proxy solicitation materials and related documents
are available on a Mentor World Wide Web site at http://www.mentorg.com/file.
The Dealer Manager for the offer is Salomon Smith Barney. The Information Agent
for the Offer is MacKenzie Partners, Inc., which can be reached toll-free at
800-322-2885 or by collect call at 212-929-5500.
Contacts: Anne M. Wagner/Ry Schwark Todd Fogarty/Roy Winnick
Mentor Graphics Corporation Kekst and Company
503/685-1462 212/521-4800
