Daetwyler backs away from bidding war for UK Raspberry Pi maker

(Adds Daetwyler, analyst comments, details, share movement)

By Sanjeeban Sarkar and Anna Serafin

Aug 18 (Reuters) - Switzerland's Daetwyler said on Thursday it would not make a higher offer for Premier Farnell (LSE: PFL.L - news) , potentially paving the way for U.S (Other OTC: UBGXF - news) . rival Avnet Inc (NYSE: AVT - news) to take over the British firm that makes the Raspberry Pi mini computer.

Premier Farnell withdrew a recommendation for Daetwyler's cash offer of 165 pence per share last month, after receiving a 185 pence bid from Avnet.

Many analysts have since expected Daetwyler, an electronic component distributor, to return with a higher offer, potentially sparking a bidding war.

However, Daetwyler said on Thursday that the terms of its previous offer were final and that the offer would lapse on Aug. 21.

"Daetwyler has come to the conclusion that it is better for the company to exploit the financial resources by implementing the stated profitable growth strategy through both organic means and acquisitions," spokesman Guido Unternährer told Reuters via email.

Shares (Berlin: DI6.BE - news) in Premier Farnell, whose low-cost computers help millions get online and learn coding, were trading 4.3 percent lower at 183.7 pence.

A spokesman for Premier Farnell declined to comment, while Avnet was not available for comment outside regular business hours in the United States.

Buying Premier would allow Avnet to capture market share earlier in the design process, while Daetwyler was looking to expand the global reach and scale of its product range.

Daetwyler had also expected the deal to lead to gross profit synergies of 25 million to 35 million Swiss francs as well as cost synergies of the same amount.

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Phoenix-based Avnet could still have a battle ahead, as it tries to close its largest acquisition, analysts say.

A sharp decline in the value of the pound since Britons voted to leave the European Union on June 23 has made some British companies more attractive to overseas suitors.

Japan's SoftBank Group Corp (Xetra: 891624 - news) sparked a wave of deals in the sector when it agreed to buy British chip designer ARM Holdings for $32 billion last month.

Premier Farnell looks especially attractive as its shares have been weakened by a string of profit warnings last year amid slowing sales growth in its key British and North American markets, which forced it to cut dividend and sell a non-core unit.

Although Premier Farnell's shares were about 75 percent higher as of Wednesday's close since Daetwyler's offer was made public on June 14, they are still trading 39 percent lower than their post-recession high of 313 pence hit in March 2011.

Arrow Electronics (NYSE: ARW - news) could be a likely bidder, as its business was similar to that of Avnet and the purchase could help it achieve a similar boost, Peel Hunt analyst Henry Carver said.

Daetwyler had said that if the board of directors decided not to pursue the acquisition, it would incur one-off deal costs of around 4 million to 8 million Swiss francs.

Daetwyler would also face one-off costs of around 35 million to 40 million Swiss francs for currency hedging and exchange rate losses, which could hit its financial result. (Reporting by Anna Serafin and Sanjeeban Sarkar, writing by Esha Vaish,; Editing by Thyagaraju Adinarayan, Sunil Nair and Adrian Croft)