Micrel Again Urges Shareholders To Reject Takeover Bid

May 14, 2008 by Jeff Shepard

Micrel, Inc. and its Board of Directors issued a letter to its shareholders regarding proposals made by Obrem Capital Management ("OCM") to be voted upon at the May 20, 2008 Special Meeting of Micrel shareholders. The following is a portion of the letter:

Dear Shareholder:

Your vote at the May 20, 2008 Special Meeting of Micrel Shareholders is important. As you already know, Obrem Capital Management (OCM), a hedge fund that owned Micrel stock for only one month before launching their hostile attack against Micrel, is attempting to throw out the highly qualified and independent Board you elected, insert their hand-picked slate of inexperienced nominees and force a sale of Micrel in one of the most challenging market conditions the industry has seen in years.

OCM stated in their initial public letter to Micrel on March 12th that their only strategy is to sell the Company. They had no intention of operating Micrel on a standalone basis and did not even acknowledge that a sale might not occur. On May 6th, almost two months after the first letter and less than two weeks before the vote on their proposals, OCM put out a hastily concocted "plan" for operating Micrel on a standalone basis. We can only assume that they are hearing the same criticisms from shareholders as we are – OCM’s plan to force a sale of Micrel is not a value maximizing proposition – and they are scrambling to deflect criticism of their senseless proxy fight.

The plan that OCM, a hedge fund that has never operated a company, has thrown together on the fly is overly-simplistic and unrealistic and underscores their lack of significant operating expertise. "Focus on the Right Markets with the Right Products" and "considering moving the headquarters�" to "e.g., Phoenix" are simply not well thought-out strategies.

We believe that giving the keys to OCM to attempt to force a sale in today’s extremely challenging market conditions would be a mistake. A failed sale process followed by their unviable standalone plan would destroy the value shareholders rightly deserve by, among other things, irreversibly damaging the strong customer relationships OCM acknowledges we possess and spurring significant loss of key talent.