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Vishay eyes beefed up IR takeover plan

Posted: 08 Oct 2008 ?? ?Print Version ?Bookmark and Share

Keywords:plan takeover? discrete semiconductors?

Vishay Intertechnology Inc. is mulling over plans to boost the price of its $1.7 billion offer to acquire International Rectifier Corp.

Vishay and IR also slammed each other in separate releases in regards to Vishay's proxy war with IR.

Recently, Vishay made a non-binding, unsolicited proposal to acquire IR for $1.6 billion in stock. IR rejected that bid, but Vishay is moving full speed ahead with the proposed takeover plan.

Amid a lowered forecast by someand a sudden slowdown for discrete semiconductorsVishay has recently increased its bid to acquire IR for $1.7 billion.

Vishay has also proposed three new directors for IR. And Vishay has commenced litigation in the Delaware Chancery Court regarding the timing of IR's delayed 2007 and 2008 annual meetings and its proposed bylaw amendments.

It has rejected that offer. But now, Vishay may increase its offer. "We continue to believe our $23.00 per share cash offer represents full, fair and immediate value for International Rectifier stockholders," according to Vishay.

"We also continue to believe that our premium offer is far superior to what International Rectifier could hope to achieve on its own in the foreseeable future through execution of its three-year turnaround 'roadmap' that is, as a leading independent research analyst recently described it, 'too aggressive' and 'an optimistic outlook indeed,' " according to the company.

"'We remain highly skeptical about the dramatic improvement reflected in International Rectifier's most recent business plan, which was announced shortly after we publicized our initial acquisition proposal," the company said.

"Nonetheless, if IR can, through good faith negotiations, demonstrate to Vishay that a further price increase is justified, Vishay would be willing to improve its offer," according to Vishay. "In this regard, Vishay would seek to obtain substantiation of International Rectifier's new business plan, particularly the $60 million reduction in cost of goods sold within two years and the projected substantial increase in revenues and gross margin."

War beckons
Recently, Vishay launched a proxy war as a means to acquire IR. On Monday, Vishay announced that RiskMetrics Group recommends that stockholders of IR vote for the election of Vishay's three independent director nominees Ronald Ruzic, William Vinson and Professor Yoram (Jerry) Windat IR's delayed 2007 annual meeting scheduled to be held on Oct. 10.

RiskMetrics is an independent U.S. proxy advisory firm and its voting analyses and recommendations are relied upon by hundreds of major institutional investment funds, mutual funds and fiduciaries throughout the country.

In a statement, IR said that it has filed with the U.S. Securities and Exchange Commission and mailed to shareholders a letter highlighting the skepticism with which independent proxy advisory firms and investment analysts have viewed Vishay's proposals in advance of its annual on Oct. 10.

"We are very pleased by the strong support we have received from the independent research analyst community and from three leading independent proxy advisory services. This is further validation of IRF's strategic roadmap as the clearly superior alternative to Vishay's ill-advised, speculative and highly conditional offer," said Richard J. Dahl, chairman of IR, in a statement.

- Mark LaPedus
EE Times

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