Has Pleasant Lake Partners Made An Offer MagnaChip Semiconductor Corporation (MX) Can’t Refuse?

We will take a quick look at the recent financial performance of the company in order to see whether MagnaChip is indeed struggling to run its businesses. A few weeks ago, MagnaChip Semiconductor Corporation announced its financial results for the second quarter, posting revenue of $162 million, which was down by 1.7% year-over-year. At the same time, the company posted a net loss, on a GAAP basis, of $30.6 million or $0.90 per diluted share, compared to net income of $15.0 million or $0.43 reported a year ago. The company’s net loss has been affected by lower revenues and gross profit, but the non-cash foreign currency translation loss also put a mark on this figure. MagnaChip has been attempting to make the most of its previously-announced comprehensive cost reduction program, which resulted in reducing spending by roughly $20 million in the first half of the year. MagnaChip intends to continue to reduce spending, which might signal that the company is focused on its core business rather than on evaluating strategic alternatives.

Even though Pleasant Lake Partners made a more or less attractive offer, it seems that the saga surrounding MagnaChip will keep moving on. The company’s Board of Directors has already made it clear that it does not intend to sell MagnaChip by employing the poison pill strategy, so only time will tell how the current situation between the company and the investment firm will play out.

Disclosure: None