International Rectifier Corp. on Friday rejected a $1.6 billion takeover offer from Vishay Intertechnology Inc., arguing that the El Segundo power management chipmaker is worth more and can do better on its own.
Vishay, a Malvern, Pa. semiconductor maker, earlier this month offered $21.22 per share for the company, about a 13 percent premium over International Rectifier’s closing price at the time.
“The board believes that the proposal by Vishay does not value the company and its future prospects appropriately,” said Chairman Richard Dahl said in a statement. “In our judgment, IR shareholders will be better served by allowing management to move forward with its strategic plan.”
International Rectifier shares are down 37 percent this year amid problems with rising manufacturing costs and excess inventory. Chief Executive Oleg Khaykin, who replaced founder Eric Lidow following an earlier internal probe into accounting irregularities, said he plans to reduce expenses by getting rid of obsolete inventory and trimming production costs.
The company in a separate announcement said it expects to miss the filing deadline for its annual quarterly report with the Securities and Exchange Commission because it was still working on financials related to the earlier accounting probe.
The company recently finished restating at least six quarters of financials after an internal investigation determined that a Japanese subsidiary then 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.
In April 2007, Vishay bought International Rectifier’s power-control systems business, but has since called for the sale to be rescinded. It accused International Rectifier of overstating financial forecasts for part of the business it acquired. International Rectifier has said it doesn’t believe the claim has merit.
At least one analyst has 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.
International Rectifier shares were down 63 cents to $20.69 in mid-morning trading on the New York Stock Exchange.
