By: Andrew Wahl

An update to my recent feature story on Gennum’s proposed acquisition of Tundra Semiconductor:  as I reported, the initial price tag of $4.43 per share was indeed too good to be true.

On Friday, Gennum and Tundra announced an amended offer that jacks up the value of the deal by some 31%, boosting the cash-and-share deal’s purchase price to $112 million from approximately $86 million when it was first announced on Mar. 19. Now Tundra shareholders are being offered $5.81 in cash or 1.1679 common shares of Gennum (or some combination of the two), up from $4.43 per share or 1.1575 Gennum shares. Also, current Tundra shareholders are expected to end up owning about 23% of the combined company, versus 18% under the previous offer.

Why the sweetened pot? Clearly executives heard from institutional shareholders in the last couple of weeks that the deal undervalued Tundra:

“We considered a number of factors including the feedback that we have received from Tundra shareholders,” said Gennum spokeswoman Robin Valtonis on why Gennum raised the bid…. “We believe that the increased offer will assist in ensuring a successful completion of the transaction.“(from the Financial Post)

Brian Piccioni, an analyst at BMO Capital Markets, remains unconvinced. “We still believe it is completely inadequate, although somewhat less inadequate than before,” he wrote in an e-mail to me this morning. “Ultimately, it is up to the shareholders to decide.”

The shareholder meeting is set for Friday, May 8.