International Rectifier, Vishay seek shareholder support ahead of Friday election

By Lisa Kerner

Charlotte, N.C., Oct. 6 - International Rectifier Corp. and Vishay Intertechnology Inc. continued to battle for International Rectifier shareholder support ahead of director elections on Friday.

Vishay is seeking the election of Ronald M. Ruzic, William T. Vinson and professor Yoram (Jerry) Wind at International Rectifier's delayed 2007 annual meeting of stockholders, a company news release said.

Even if its nominees are elected, Vishay will not capture control of International Rectifier's eight-member board because the board is staggered, Vishay founder and executive chairman Dr. Felix Zandman said in a company news release.

In a letter to shareholders, International Rectifier said, "Except to seek to compel a sale of the company in one of the worst merger and credit markets in memory, what would these three Vishay nominees add?"

International Rectifier said support for the Vishay nominees "would be an endorsement of a mediocre and untimely offer - which may never close given the conditionality - and could significantly undermine the board's negotiating leverage with Vishay or with any third party if the board determined to sell the company."

According to International Rectifier, in the past five days, three major independent proxy advisory firms recommended its shareholders vote in favor of the company's nominees and against Vishay's nominees and other proposals.

The three proxy firms were Glass Lewis & Co., Proxy Governance and Egan-Jones Proxy Services.

As previously reported, Vishay wants International Rectifier's stockholders to vote in favor of three amendments to the company's bylaws:

• To ensure that the 2008 annual meeting to elect class II directors is held no later than Dec. 21;

• To prevent International Rectifier's directors from serving beyond their three-year terms without stockholder approval; and

• To prevent International Rectifier from adjourning its 2007 annual meeting without the approval of a majority of stockholders present or represented by proxy at the meeting.

Vishay could increase offer

It making its case to shareholders, Vishay said it may be willing to increase its $23-per-offer for International Rectifier if the company can demonstrate, through good-faith negotiations, that a price increase is justified, according to Vishay news release. Richard J. Dahl, International Rectifier's chairman of the board, called the move a "ploy."

"A hypothetical increase to an already hypothetical, highly conditional offer should be viewed as yet another attempt to distract shareholders from the serious risks of accepting Vishay's nominees and bylaw proposals," Dahl added in a company statement.

Vishay said it would seek to obtain substantiation of International Rectifier's new business plan, particularly the $60 million reduction in cost of goods sold within two years and the projected substantial increase in revenues and gross margin.

"We continue to believe our $23.00 per share cash offer represents full, fair and immediate value for International Rectifier stockholders," Vishay said.

Dahl, in an Oct. 6 letter to shareholders, said Vishay's offer is subject to "an extraordinary number of conditions, including the receipt of the proceeds of financing which it has yet to obtain and may never obtain in this turbulent credit market."

On Sept. 29, a Vishay subsidiary began a cash tender offer for International Rectifier. The offer ends at midnight ET on Oct. 27.

International Rectifier, an El Segundo, Calif., power management technology company, rejected Vishay's prior $21.22-per-share offer.

Vishay is a Malvern, Pa.-based manufacturer of discrete semiconductors and passive electronic components.

Mentioned in this article:

International Rectifier Corp. NYSE: IRF

Vishay Intertechnology Inc. NYSE: VSH

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