DSP Communications to Buy Proxim

Shares of DSP Communications Inc. plunged $17.125 to close at $35.25 on Nasdaq amid concerns it may have offered too much to acquire wireless networking product maker Proxim Inc. Proxim’s shares rose $2.80 to close at $21.50. Based on DSP’s closing stock price of $52.375 on Monday, the deal would be valued at $400 million, but the overall value fluctuates with the stock price. Under terms of the deal, Mountain View-based Proxim shareholders will get 0.70 DSP common share for each Proxim share. Executives of Cupertino-based DSP said the merger will extend DSP’s strength in both wireless voice and data communications. The merger comes a year after DSP acquired CTP Systems Ltd.