International Rectifier Gets Acquisition Offer

0

International Rectifier Corp. has received an unsolicited and potentially hostile $1.6 billion cash takeover offer from Vishay Intertechnology Inc., which has been in a dispute with the El Segundo power management chipmaker.

Vishay, a Malvern, Pa.-based semiconductor maker, said early Friday that it is offering $21.22 per share for the company, about a 13 percent premium over International Rectifier’s Thursday closing price, and a 20 percent premium over its 30-day moving average.

International Rectifier shares closed up $3.67, or 19.5 percent, to $22.49 Friday on the New York Stock Exchange, suggesting the market believes Vishay may have to raise its price. Prior to the Vishay’s announcement, International Rectifier shares had lost half of their value over the last year as the company struggled to recover from an accounting scandal.

In a response to the offer released after Friday’s market close, International Rectifier suggested that Vishay’s bid might not be entirely friendly but said that its board of directors will evaluate the proposal in consultation with its advisers. In April 2007, Vishay bought IR’s power-control systems business, but IR noted in its quarterly report earlier this month that Vishay is calling for the sale to be rescinded.

Vishay accused International Rectifier of overstating financial forecasts for part of the business it acquired. International Rectifier said it doesn’t believe the claim has merit. “IR intends to vigorously dispute and defend these claims,” the company said in its Friday response to the acquisition bid.

In May 2007, a month after the Vishay deal closed, International Rectifier disclosed accounting irregularities that lead to the resignation last October of Alex Lidow, its then chief executive. Lidow, who founded the company in 1947, continued to serve as board chairman until retiring last May.

The company under a new chief executive recently finished restating at least six quarters of financials after an internal investigation determined that a Japanese subsidiary responsible for about 10 percent of the company’s $1.3 billion in annual revenue would occasionally enter what were termed “unsubstantiated orders” into the system, artificially inflating revenue.

Friedman, Billings, Ramsey & Co. analyst Craig Berger suggested that International Rectifier might be justified in seeking an acquisition price as high as $29 a share, based on its plans to revive profit, according to a report obtained by Bloomberg News.

No posts to display