A new thread for Cambridge Silicon Radio, a bluetooth play for 2004.

Cambridge Silicon Radio Holdings Ltd, the Bluetooth technology group that is about to list on the London Stock Exchange, said its offering will be priced at 160-200 pence a share.

The indicative price range corresponds to an offer size of 54-68 mln stg and a market capitalisation for the company of 192-239 mln stg after flotation.

CSR designs and manufactures single-chip radio devices - focusing initially on solutions for the 2.4GHz Bluetooth personal area networking standard. The background and experience of our development team give CSR a unique advantage to help OEMs exploit the new wave of wireless networking, allowing us to offer the most highly integrated single-chip Bluetooth solutions, which are based on commodity CMOS technology with all its inherent advantages.

www.csr.com

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CSR, which has secured over 70 mln usd of funding from a number of investors including Compaq Corp, Philips Electronics NV, Sony Corp, Intel Corp and 3i Group PLC, was founded in 1998.

The company claims on its Website to be the world's leading provider of Bluetooth, accounting for 60 pct of all Bluetooth end-products.

Bluetooth is a low-cost, short-range radio link between mobile PCs, mobile phones and other devices, enabling users to connect a wide range of devices easily and simply, without the need for cables.

csr goes ex div 14/08/2013

Nive bounce today.

"We (Liberum) upgrade CSR from Hold to Buy given the recent pull back in the share price. We expect CSR to meet consensus expectations for H2’13, but believe there are upside risks to FY’14 revenue estimates. CSR is ramping multiple new products (Bluetooth smart, cameras, Auto SoC, WiFi audio) in 2014 which could lead to stronger than expected revenue growth. Post the pull back CSR once again trades at a discount to its peer group (15% on P/E, 29% on EV/EBITDA). Upgrade to Buy, 550p price target.

Underperforming peers: CSR’s share price has declined by c. 20% since its peak in July underperforming its peers (SOX index –3%, FTSE250 +2%). The lack of consensus upgrades following Q2’13 results along with speculation that CSR may be looking at large scale M&A given the delay in starting the $25m buyback maybe the reason behind the underperformance. We believe large acquisitions are highly unlikely and expect the buyback to start imminently.

Stars aligned for 2014: CSR’s core business is expected to grow 14% YoY in FY’13, without any significant product launches. Looking into FY’14, we believe core growth could surprise on the upside (greater than 13%) given multiple new products are ramping at the same time such as: i) Bluetooth smart; ii) a reworked camera portfolio; iii) Auto SoC; iv) WiFi audio; v)Indoor location in some form.

24% of market cap in cash: Post the $25m buyback we expect CSR to end FY’13 with c. $297m of net cash or 24% of its market cap. We believe further cash returns are likely in 2014.

Discount to peers: Post the recent pull back and peer group re-rating, CSR once again trades at a discount to its peers (15% on CY’14 P/E, 29% on CY’14 EV/EBITDA, 53% on CY’14 EV/Sales). We upgrade to Buy and increase our price target marginally to 550p (from 540p), as CSR’s peer group has re-rated."

Half Year And Q2 2014 Results

· Q2 2014 financial performance:
o Revenue of $193.7m (Q2 2013: $262.5m) down 26% year-on-year as expected, mainly reflecting a 70% decline in Legacy revenue,
o Core revenue of $175.6m (Q2 2013: $203.1m), down 14% year-on-year, primarily due to weakness in Camera, Gaming and non-factory-fit Auto, as well as reflecting non-recurring Voice & Music revenue in China during Q2 2013,
o Record underlying gross margin 57.5% (Q2 2013: 52.6%) and record IFRS gross margin 57.0% (Q2 2013: 51.8%) due to change in revenue mix towards Core,
o Underlying operating profit of $29.5m (Q2 2013: $39.3m); IFRS operating profit sharply up to $64.5m (Q2 2013: $22.3m) mainly reflecting benefit from Imaging IP asset sale,
o Underlying diluted earnings per ordinary share of $0.13 (Q2 2013: $0.18),
o Ended Q2 2014 with cash, cash equivalents and treasury deposits of $236.8m (Q2 2013: $285.0m), due to $50m share buyback and payment of 2013 final dividend,
o Continue to return cash to shareholders with additional $20m buyback and $20m EBT purchase.
· Momentum in platform strategy:
o aptX® added 27 licences during Q2 2014, taking total to nearly 280, and increased adoption for aptX in Automobiles, with Clarion implementing aptX for in-vehicle head units,
o Series of Tier One design wins for Bluetooth Smart including Lenovo and Philips,
o Three Tier One design wins for Bluetooth and Bluetooth Smart in set-top boxes,
o CSRmesh gaining increasing market traction in consumer lighting and home automation,
o Entered into volume production for Auto factory-fit SoC during Q2.
· Interim dividend $0.052 per ordinary share, up 15% from the 2013 interim dividend of $0.045 per ordinary share.

Wow top riser today.

The Board of CSR plc (“CSR”) notes recent press speculation and confirms that it has received an approach regarding a possible offer for the company from Microchip.

The price proposed by Microchip has been rejected and the Board is considering its options for the company.

This statement is being made by CSR without prior agreement or approval of Microchip. There can be no certainty that an offer will be made nor as to the terms on which any offer might be made.

UBS comment:
"In our view, it is understandable that CSR could be a potential takeout target given that the company is a leader in Bluetooth components for headsets, speaker-bars and supplies solutions for in-dash automotive solutions. Bluetooth, as a low-power wireless technology, is likely to be a key component in the ‘Internet of Things’ and CSR has been delivering interesting innovation in the form of its CSR Mesh solution to enable smart networks between Bluetooth devices. Having a leading Bluetooth technology inhouse could enable companies to come with more innovative solutions to address the Internet of Things.
We would expect some confirmation from the company (given UK takeover rules) on the validity of the article’s claims. In this context, we would highlight the following as possible hurdles: 1) Many larger semiconductor companies that could be potential suitors already have some degree of Bluetooth technology in-house; 2) Bluetooth Smart for wearables is already a highly competitive space (competitors include TI, Broadcom, Dialog, Nordic Semi); and 3) Bluetooth technology can be licensed from companies, including Imagination Tech and Sunrise Micro, providing an alternative solution to access this technology block.
Despite the recent strength, we would expect confirmation or denial of this to drive the share price in the short term. CSR trades on 24.9x P/E ’15E and 17.2x ex stock comp."

CSR plc Rule 2.7 Announcement

Summary

· The Board of Qualcomm Incorporated is pleased to announce that it has reached agreement with the Board of CSR plc ("CSR") regarding the terms of a recommended cash offer through which the entire issued and to be issued ordinary share capital of CSR will be acquired by Qualcomm Global Trading Pte. Ltd. ("QGT"), an indirect wholly owned subsidiary of Qualcomm Incorporated (together or individually as the context requires, "Qualcomm").

· Under the terms of the Acquisition:

each Scheme Shareholder will be entitled to receive 900 pence in cash for each CSR Share

· The offer price represents a premium of approximately:

· 56.5 per cent. to the Closing Price per CSR Share of 575 pence on 27 August 2014 (being the last Business Day prior to the commencement of the Offer Period);

· 66.3 per cent. to the average Closing Price per CSR Share of 541 pence in the one month to 27 August 2014 (being the last Business Day prior to the commencement of the Offer Period); and

· 56.5 per cent. to the average Closing Price per CSR Share of 575 pence in the three months to 27 August 2014 (being the last Business Day prior to the commencement of the Offer Period).

· The Acquisition values the entire issued and to be issued share capital of CSR at approximately £1,560 million.

· It is intended that the Acquisition be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act, further details of which are contained in the full text of this announcement. However, QGT reserves the right, subject to the consent of the Panel, to effect the Acquisition by way of a Takeover Offer.

· The CSR Directors, who have been so advised by J.P. Morgan Cazenove and Goldman Sachs International, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the CSR Directors, J.P. Morgan Cazenove and Goldman Sachs International have taken into account the commercial assessments of the CSR Directors. J.P. Morgan Cazenove and Goldman Sachs International are providing independent financial advice to the CSR Directors for the purposes of Rule 3 of the Code.

· Accordingly, the CSR Directors intend unanimously to recommend that CSR Shareholders vote in favour of the Scheme at the Court Meeting and in favour of the General Meeting Resolutions, as each CSR Director has irrevocably undertaken to do (or in the case of CSR ADSs, instruct the depositary to do so) in respect of their own beneficial holdings, being in aggregate a total of 884,457 CSR Shares (including CSR Shares underlying CSR ADSs), representing approximately 0.54 per cent. of the existing issued capital of CSR as at 14 October 2014 (being the latest practicable date prior to this announcement).

· The Acquisition will be subject to the satisfaction or waiver of the Conditions set out in Appendix I to this announcement and which will be set out in the Scheme Document.

· It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be posted to CSR Shareholders within 28 days of the date of this announcement.

· CSR (LSE: CSR; NASDAQ: CSRE) is an innovator in the development of multifunction semiconductor platforms and technologies for the Auto, Consumer and Voice & Music markets. CSR was established in Cambridge in April 1999 by an engineering and marketing team that previously worked at Cambridge Consultants Limited, a technology and consulting firm based in Cambridge. CSR currently focuses on the Auto, Consumer and Voice & Music business segments in its Core business group. In addition, CSR's Legacy Products business comprises discontinued business lines in which CSR has ceased investment and which include digital television and set-top boxes and handset connectivity and handset location. CSR is headquartered in Cambridge, UK and has 2,130 employees in eleven countries around the globe. CSR reported revenue of US$960.7 million for its 52 week financial period ended 27 December 2013.

· Qualcomm is a global leader in developing and commercialising mobile processing and wireless communications technologies. The Acquisition complements Qualcomm's current offerings by adding products, channels and customers in the important growth categories of Internet of Everything (IoE) and automotive infotainment, accelerating Qualcomm's presence and path to leadership. The opportunity is aligned with Qualcomm's strategic priorities in these rapidly growing business areas.

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