Vishay Offers To Acquire All Outstanding Shares Of International Rectifier; Asks For Rescission Of Prior Purchase Of PCS Business Unit

Vishay Intertechnology, Inc., one of the world’s largest manufacturers of discrete semiconductors and passive electronic components, announced that it has made a non-binding proposal to the International Rectifier Corp. (IR)® Board of Directors to acquire all the outstanding shares of IR common stock for $21.22 per share in cash, or total payment of approximately $1.6 billion. This offer represents an approximately 13% premium over the closing price of IR common stock of $18.82 on August 14, 2008, and a 20% premium over its 30 day moving average of $17.69. The proposal is subject to diligence and other customer conditions.

If the deal is completed, and IR accepts the unsolicited bid, some speculate that it could enable Vishay to corner the discrete chip market. IR and Vishay are among the world’s largest manufacturers of discrete semiconductors. Vishay is also a supplier of passive electronic components. Nonetheless, other observers doubt that IR will accept the offer, and have speculated that companies such as STMicroelectronics, Fairchild Semiconductor, and ON Semiconductor may initiate their own offers.

IR responded that it will "evaluate the proposal in consultation with its financial and legal advisers, and make a determination in due course." The company urged its shareholders to take no action until a determination has been made. The company stated that its Board of Directors will thoroughly review the prospects and potential of IR’s current strategic plan, including its recently disclosed turnaround strategy and the nature and terms of Vishay’s proposal.

More importantly, IR also noted that it has "received correspondence from Vishay setting out certain claims against IR arising from the prior sale of an IR unit to Vishay" as well as "an additional claim for rescission of the prior transaction." IR states that it intends to vigorously dispute and defend these claims. IR sold its Power Control Systems (PCS) business unit to Vishay for $290 million in cash in 2006. In April of this year, Vishay sold its automotive modules and subsystems business unit as part of the acquisition of the PCS business of IR.