Vishay bid for rival goes to shareholders

Vishay Intertechnology Inc., of Malvern, will take its battle to gain control of a California semiconductor company to shareholders tomorrow by offering a slate of three directors for the board of the takeover target.

The target, International Rectifier Corp., has rejected Vishay's advances, saying that its $1.7 billion offer substantially undervalues the company.

Vishay issued a statement yesterday questioning International Rectifier's plan for boosting company profits and accusing its current board of directors of spending "enormous sums to address accounting improprieties that occurred on its watch."

The board, Vishay said, "paid itself so well that it is fair to question its independence."

International Rectifier is urging its stockholders to reject the offer of Vishay, itself a semiconductor-maker, arguing that it has a plan to substantially boost profitability over the next several years.

"The management has a strategy to deliver a whole lot more; and if we are left as our own company, we will execute the strategy and shareholders will be rewarded," said Graham Robertson, International Rectifier's vice president for corporate communications.

International Rectifier manufactures semiconductors used to regulate the flow of power in personal computers, automobiles, and a wide range of household appliances, among other applications.

The two companies have been in a dispute since last year, when Vishay spent $290 million to buy a business unit of International Rectifier. Subsequently, Vishay accused International Rectifier of misstating forecasts for portions of the business that it purchased, an accusation that International Rectifier denies.

"Our goal is to get three directors on the board who are not beholden to Vishay" and who can objectively evaluate offers for the company, said a Vishay spokeswoman of the annual meeting.

Were Vishay to succeed in getting its directors on International Rectifier's board, it still would not have a majority on the seven-member panel. Yet it could attempt at subsequent shareholder meetings to offer additional new director candidates.

Vishay increased its offer to $23 a share for International Rectifier in September, contending that it had fairly evaluated the company's prospects.

But International Rectifier management contended that Vishay was pursuing an "opportunistic" strategy that would penalize Vishay shareholders by purchasing the company at an artificially suppressed value. In the same way, International Rectifier had said an earlier offer of $21.22 a share was inadequate.

Robertson said that the company had initiated a strategic plan to capitalize on new products that would greatly increase the value of its stock in ensuing years and that Vishay's offer paled in comparison.