Email Facebook Twitter

London South East Natural Resources Webcast

Finance & Stock Market News

China chip deal gamble fails for Silicon Valley insider

Thu, 14th Sep 2017 01:36

By Liana B. Baker

NEW YORK, Sept 13 (Reuters) - On paper, the offer from the private equity fund was a lucrative one - a $1.2 million signing bonus, a $2 million cut of its management fees and a 20 percent stake in the firm itself.

But in practice, Ray Bingham's partnership with Canyon Bridge Capital Partners has proven costly.

Canyon Bridge was launched with a focus on acquiring technology investments, but President Donald Trump on Wednesday dealt a body blow to its ambitions, blocking its first deal, a planned $1.3 billion acquisition of chipmaker Lattice Semiconductor Corp.

The Palo Alto, California-based buyout fund is partly backed by cash from China's central government and that link, first reported by Reuters in November, has proven controversial. Bingham has since left the boards of several tech companies, including Oracle Corp, due to concerns about his involvement with the firm.

U.S. Treasury Secretary Steven Mnuchin said in a statement that the deal had national security concerns related to the use of Lattice's products by the U.S. government.

Yet the company has said it no longer sells its chips to the U.S. military.

Trump's rejection potentially hurts Canyon Bridge's ability to acquire other Western semiconductor companies, which could prove to be a high hurdle for a firm dedicated to investing in technology.

Sources have previously said Canyon Bridge has been working on a bid for British semiconductor company Imagination Technology Group. If Canyon Bridge clinches that deal, it would also be subject to review by the Committee on Foreign Investment in the U.S. (CFIUS) review since Imagination Technologies acquired U.S. chip designer MIPS in 2013.

While Canyon Bridge may choose to divest MIPS, which accounts for a small fraction of Imagination Technologies' business, there is no certainty that would be enough to resolve all CFIUS issues, according to the sources.

Canyon Bridge did not immediately respond to a request for comment for this story.


Before the 71-year-old tech sector veteran joined Canyon Bridge last year, he held several high-profile board seats, including Oracle, Cypress Semiconductor Corp and Flex Ltd .

Now, his only public board involvement is at human resources software firm TriNet Group Inc.

The turn of events for Bingham demonstrates the challenges of working with China-based investors, where state-backed funding can be a key hurdle to U.S. deals.

Canyon Bridge's Chinese state links were a bone of contention at Oracle, which expressed concern that Bingham's involvement with Canyon Bridge could hurt Oracle's relationship with the U.S. government, according to a court filing.

Oracle's board told Bingham in March he could not retain his seat and continue to be a partner of Canyon Bridge, according to Bingham's deposition in Rodgers’ lawsuit. In response, Bingham decided to step down.

Bingham had received $890,902 in 2016 from Oracle, making him the second-highest paid board director at the company behind founder Larry Ellison. He also had an annual salary and bonus from Cypress worth $900,000, as well as equity grants worth $4.5 million.

Bingham resigned from Cypress Semiconductor in June following a proxy fight at the company when founder, T.J. Rodgers, launched a proxy contest to remove him from the board.

Rodgers alleged Bingham faced irreconcilable conflicts of interest because of his involvement with Canyon Bridge, a claim which Bingham and Cypress objected to.

In late June, Bingham also resigned as chairman of the board of Flex, a contract manufacturing company. His resignation was "not a result of any disagreement with the policies, practices or procedures of the company," according to a Flex filing.

A Flex spokesperson declined to comment further.

A TriNet spokesperson on Wednesday confirmed Bingham was still on the board.

"I chose to resign from these positions in order to focus all of my attention on an exciting new opportunity with Canyon Bridge, Ray Bingham said in a statement late Wednesday.

"I am thrilled to be part of Canyon Bridge and very optimistic about our future as a fund committed to helping technology companies become true market leaders around the globe."

(Editing by by Carmel Crimmins and G Crosse)

(c) Copyright Thomson Reuters 2017. Click For Restrictions -

Back to Finance News

Share Price, Share Chat, Stock Market news at
FREE Member Services
- Setup a personalised Watchlist and Virtual Portfolio.
- Gain access to LIVE real-time Regulatory News (RNS).
- View more Trades, Directors' Deals, and Broker Ratings.
Share Price, Share Chat, Stock Market news at

Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.