Activist investor Ralph Whitworth told National Semiconductor Corp. that he may not seek two seats on its board because discussions with the company have been productive, according to a government filing Friday.
Whitworth's Relational Investors, which buys shares in poorly performing companies and tries to turn them around, will refrain from soliciting votes for nominees to National Semiconductor's board if talks continue to improve and an acceptable resolution is reached, Relational said in a filing.
Relational said March 3 that it had taken a 7.2% stake in Santa Clara, Calif.-based National Semiconductor, and criticized the company for lagging behind the performance of the Philadelphia semiconductor index and rival chip makers.
National Semiconductor has since cut 340 jobs by closing a slow-growing line of business and announced plans to sell a unit that makes chips for hand-held computers and television set-top boxes.
"Whitworth ignited motion that might have otherwise been slower, and I think a lot of shareholders were frankly happy to see it," said Richard Whittington, an analyst with American Technology Research who rates National Semiconductor shares "buy" and said he doesn't own them.
National Semiconductor's shares have increased 33% since March 3 while the Philadelphia semiconductor index has risen 31%.
Rival Texas Instruments Inc., the world's leading manufacturer of chips for mobile phones, has gained 16% in the same period.
National Semiconductor fell 26 cents to $21.50 on the New York Stock Exchange.
National Semiconductor will continue to talk to Relational until the company's annual meeting, which probably will be held in October, National Semiconductor spokesman Jeff Weir said.
Friday was the deadline for nominating board members, Relational said.
A phone message left for Whitworth at his office wasn't returned.