With a special shareholders' meeting three weeks away, the battle for the future of analog chipmaker Micrel Corp. [MCRL] continues to intensify. On Monday, activist shareholder Obrem Capital Management LLC issued a letter to shareholders pitching its board slate. Obrem, Micrel's largest shareholder with about 15% of the company, argued that the current board has failed shareholders "spectacularly."

It argued that one dollar invested in Micrel a decade ago would have returned 11% including dividends, while that same amount invested in a 10-year Treasury bond would have yielded a 75% return. It also described Micrel as an industry laggard that, despite management's assurance that the company would perform better than analog industry peers, has done the opposite.

Obrem also accused the Micrel board of refusing to communicate with the hedge fund regarding the company's strategy.

As it has previously, Micrel responded by calling Obrem's statements inaccurate.

"We agree with OCM [Obrem] that Micrel is undervalued, but their sole strategy of trying to sell the Company in the most challenging market conditions the industry has seen in years is short-sighted and misguided," Micrel said in a statement issued Monday. "As evidenced by our strong first quarter results, we are continuing to increase shareholder value and position Micrel for growth that exceeds the industry."

The company did manage to beat Wall Street expectations last week with its first-quarter 2008 earnings report. Shares of Micrel were down about 3.5%, to $10.00, in afternoon trading Monday. - Olaf de Senerpont Domis

See April 28 letter from Obrem via Yahoo! Finance
See April 25 Micrel letter to shareholders via Yahoo! Finance
See April 15 post from Tech Confidential
See April 1 post from Tech Confidential