Cadence proposes acquisition of Mentor

Cadence's all-cash proposal, which is not subject to any financing condition, represents a 30% premium over the closing price of Mentor Graphics common stock on June 16, 2008, the last trading day prior to public disclosure of Cadence's proposal, a 59% premium over the closing price of Mentor Graphics common stock on May 2, 2008, when Cadence presented the terms of the proposal to Mentor Graphics, and a 46% premium over Mentor Graphics' average closing price for the past 30 trading days. The transaction price represents a total enterprise value of $1.6 billion on a fully diluted basis, which reflects Mentor Graphics' net debt of $69 million. "A combined Cadence-Mentor will offer customers a broader and more integrated product and technology portfolio in a timeframe that better enables them to address challenges associated with their next-generation product development," said Michael J. Fister, president and chief executive officer of Cadence. Cadence's proposal is subject to the negotiation of a mutually agreeable merger agreement, the completion of certain limited and confirmatory due diligence, and the satisfaction of other customary conditions, including receipt of regulatory approvals. Deutsche Bank Securities Inc. is acting as financial advisor to Cadence and Davis Polk & Wardwell is acting as legal counsel.