IR rejects Vishay's second offer

"Vishay's offer still significantly undervalues the future prospects of the company when compared to the value that we expect our new strategic plan to deliver to our shareholders. Our board takes its responsibility to stockholders extremely seriously. We believe that Vishay’s latest unsolicited proposal continues to represent an opportunistic attempt by Vishay to capture value that belongs to our shareholders," asserted Richard J. Dahl, chairman of the board of IR.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 9/16/2008

Following a review of Malvern, Pa-based Vishay Intertechnology Inc’s unsolicited, revised proposal of September 10 of $23 per share for all outstanding shares of International Rectifier Corp (IR), the board of directors of El Segundo, Calif-based IR said today that it has determined that the offer “significantly undervalues” the future prospects of IR and is not in the best interests of the company and its stockholders.

“Vishay’s offer still significantly undervalues the future prospects of the company when compared to the value that we expect our new strategic plan to deliver to our shareholders. Our board takes its responsibility to stockholders extremely seriously. We believe that Vishay’s latest unsolicited proposal continues to represent an opportunistic attempt by Vishay to capture value that belongs to our shareholders,” asserted Richard J. Dahl, chairman of the board of IR, in a statement.

Further, Oleg Khaykin, IR president and CEO commented, “We remain steadfast in our belief in International Rectifier’s potential and the value-creation strategy that we are implementing. This potential is reflected in part in the recent launch of our revolutionary GaN technology platform for power conversion. We look forward to communicating with our shareholders in the coming days the exciting value-creative opportunities available for our business.”

Dahl also said, “We are extremely disappointed that, in addition to offering a price that significantly undervalues the future prospects of the company, Vishay has chosen to deploy heavy-handed and disruptive tactics in its efforts - commencing a proxy contest to replace three of our highly-experienced and independent directors with its slate of hand-picked nominees; seeking to amend our Bylaws; bringing litigation against our directors and the company; threatening to launch a hostile tender offer, as well as continuing to assert meritless claims against the company related to the PCS sale -- all to pressure the board and our stockholders to sell the company at a bargain price.”

IR is urging its stockholders to support the board by voting the white proxy in favor of the re-election of Mary B. Cranston, Thomas A. Lacey and Jack O. Vance and against Vishay's proposed amendments to IR’s bylaws, and also is urging stockholders not to tender their shares into the proposed $23 per share tender offer.

IR sent its response in a letter today to Vishay’s executive chairman and its president and CEO, the text of which follows:

“Dear Drs. Zandman and Paul:

Our Board of Directors, with the assistance of our financial and legal advisors, has reviewed Vishay's unsolicited, revised proposal to acquire for $23 per share in cash and its proposed tender offer at the same price.

After detailed review, we unanimously reject your proposal and will urge our stockholders not to tender their shares into any $23 per share tender offer you may commence 'shortly'. We believe your $23 per share offer is meaningfully below the value that we expect to create for our stockholders as an independent entity. Because $23 per share is not a reasonable starting point for negotiations, we also decline to engage in discussions regarding a sale to Vishay. We base our decision on a variety of factors, including the following:

--After conducting a detailed assessment of our current business plan, the Board believes that your offer of $23 per share significantly undervalues the future prospects of the Company.

--The price of $23 per share also does not adequately compensate our stockholders for the accelerating momentum of our business, our key technology and product leadership in power management and the significant value we expect to create for our stockholders through the implementation of our strategic plan.

--Your obvious attempt to acquire International Rectifier before the market fully appreciates the upside from our strategic plan, at a low-point in the business cycle in the semi-conductor industry and in less-than robust M&A and credit markets, in an attempt to capture value that rightfully belongs to our shareholders.

We are also extremely disappointed that you have chosen to employ heavy-handed and disruptive tactics to further your opportunistic objectives, including, commencing a proxy contest to replace three of our highly-experienced directors; bringing litigation against our directors and the Company; threatening to launch a hostile tender, and continuing to assert meritless and undocumented claims against the Company due to the PCS sale.

Indeed, it would seem that our respective shareholders would be better served by us focusing on our respective business plans, deploying the dollars these contests will absorb back into the businesses, attempting to resolve any legitimate claim related to the sale of the PCS business, and creating real value.

That said, our Board has taken, and will continue to take, its responsibility to stockholders extremely seriously. We are committed to creating value and view your current proposal as not being in the best interests of International Rectifier and its shareholders. Accordingly, we have determined that the appropriate course of action is to forcefully resist your attempt to acquire our Company at an inadequate price.

Sincerely,
Richard J. Dahl, Chairman of the Board”

In response, Vishay said in a statement, “We are disappointed that International Rectifier still refuses to negotiate with Vishay regarding our increased $23.00 per share in cash proposal. We are confident our all-cash premium proposal would provide International Rectifier stockholders with far greater value than what International Rectifier could achieve on its own in the foreseeable future. It has been our strong preference to work together with International Rectifier to negotiate a mutually agreeable transaction; however, International Rectifier’s refusal to negotiate with us has left us with no alternative but to present our increased all-cash premium proposal directly to International Rectifier stockholders. We look forward to the delayed 2007 Annual Meeting on October 10, 2008, at which the International Rectifier stockholders, the true owners of the company, will have an opportunity to express their views by electing our three nominees to the International Rectifier Board of Directors.”

Monday, IR noted that it filed a preliminary proxy statement in connection with its 2007 Annual Meeting of Stockholders and will also file a Solicitation/Recommendation Statement on Schedule 14D-9 in the event Vishay commences a tender offer for the outstanding shares of IR’s common stock.

Further, Vishay today filed its preliminary proxy statement with the Securities and Exchange Commission with respect to its nomination of three independent candidates – Ronald M. Ruzic, William T. Vinson and Professor Yoram (Jerry) Wind – at IR’s 2007 Annual Meeting of Stockholders scheduled for October 10.


Also see, "IR brings out the sparkling gems to whet buyers' appetites."