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International Rectifier rejects takeover offer

August 30, 2008|From Bloomberg News

International Rectifier Corp., whose semiconductors help machines use less power, has rejected a $1.6-billion takeover offer from Vishay Intertechnology Inc., saying it was worth more and could do better on its own.

Managers hired in the last year, including Oleg Khaykin as chief executive, will help International Rectifier rebound, Chairman Richard Dahl said in a statement Friday. Vishay's offer, made Aug. 15, valued each share at $21.22, a 13% premium over the previous day's closing price.

International Rectifier shares have slumped 37% this year amid excess inventory, rising manufacturing costs and an internal probe into accounting irregularities. This month, Khaykin said he planned to reduce expenses at the El Segundo company by shedding inventory and trimming costs.

"The offer was too low, and given that new management was brought in, the plan is to run the business, not to sell it off," said J. Steven Smigie, a Raymond James & Associates Inc. analyst based in St. Petersburg, Fla.

International Rectifier shares fell 42 cents to $20.90. Vishay fell 18 cents to $8.89.

International Rectifier named Michael Barrow as chief operating officer this year and made Donald Dancer, who had been acting CEO, chief administrative officer. Dahl was named chairman in May to replace the company's founder, Eric Lidow, who retired.

Vishay's bid is an effort to increase chip sales by almost 60% a year. The Malvern, Pa.-based company, which makes electronic components for computers and automobiles, also seeks to cut selling and distribution costs after posting two consecutive quarterly losses.

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