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Israel Tax Authority Issues "Acceptable" Ruling Mobileye On Asset Sale
Monday 17 July 2017

17 July 2017 - The Israel Tax Authority has issued an acceptable tax ruling with respect to the tax treatment of the potential asset sale, liquidation and second step distribution contemplated in connection with the all cash tender offer to purchase all of the outstanding ordinary shares of Israeli driver assistance technology specialist Mobileye N.V. by US-based chipmaker Intel Corp. (NASDAQ: INTC), Intel said.

The tender offer is being made pursuant to a purchase agreement, dated as of 12 March 12, by and among Intel, Cyclops Holdings, Inc., a wholly owned subsidiary of Intel that was later converted to Cyclops Holdings, LLC, and Mobileye.

Cyclops filed a tender offer statement on Schedule TO with the US Securities and Exchange Commission on 5 April 2017.

As a result of receipt of the tax ruling and the adoption of certain shareholder resolutions at the general meeting of Mobileye shareholders in June, the minimum number of Mobileye shares that must be validly tendered and not withdrawn prior to the expiration of the tender offer has been lowered from 95% to 67% of outstanding Mobileye shares.

Withdrawal rights will terminate following the Expiration Time. Mobileye shareholders who have already tendered their Mobileye shares in the tender offer but whose willingness to tender is affected by the lower threshold for the Minimum Condition should withdraw their Mobileye shares from the tender offer immediately but in any event before the Expiration Time.

In connection with the receipt of the tax ruling and the lowering of the Minimum Condition, Intel also said that Intel and Mobileye have agreed that Cyclops will extend the offering period of the tender offer.

The tender offer, which was previously set to expire on 20 July 2017, is now scheduled to expire on 28 July 2017, unless the tender offer is extended or earlier terminated, in either case pursuant to the terms of deal.

This transaction is currently expected to close during 3Q17.

Mobileye is in the development of computer vision and machine learning, data analysis, localisation and mapping for advanced driver assistance systems and autonomous driving.

Under the deal, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for USD 63.54 per share in cash, representing an equity value of approximately USD 15.3bn and an enterprise value of USD 14.7bn.

The combination is expected to accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles.

Intel estimates the vehicle systems, data and services market opportunity to be up to USD 70bn by 2030. This transaction extends Intel's strategy to invest in data-intensive market opportunities that build on the company's strengths in computing and connectivity from the cloud, through the network, to the device.

This acquisition will combine the best-in-class technologies from both companies, spanning connectivity, computer vision, data center, sensor fusion, high-performance computing, localisation and mapping, machine learning and artificial intelligence, Intel said.

The transaction is expected to be accretive to Intel's non-GAAP EPS and free cash flow immediately. Intel intends to fund the acquisition with cash from the balance sheet.

It is expected to close within the next nine months. The deal has been approved by the Intel and Mobileye boards of directors and is subject to the receipt of certain regulatory approvals and other closing conditions. The offer is not subject to any financing conditions.

Citi and Rothschild Inc. serve as financial advisors and Skadden, Arps, Slate, Meagher and Flom LLP serves as legal counsel to Intel. Raymond James and Associates, Inc. serves as financial advisor and Morrison and Foerster LLP serves as legal counsel to Mobileye.
Date Published: 17/07/2017
Target: Mobileye N.V.
Country: USA
Deal Size: 14.7bn (USD)
Sector: Motor Vehicles
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Buyer: Intel Corp
Buyer Advisor: Citi , Skadden, Arps, Slate, Meagher and Flom