ON Semiconductor raised its offer for Synaptics to $123 a share in cash, valuing the deal at around $5.7 billion, according to an amended agreement. The revised terms come after Synaptics received an offer from another bidder.
The company previously agreed in June to issue 1.35 shares for each Synaptics share, a deal then valued at about $7 billion. ON shares closed at $118.74 on June 25, the day of the announcement, but have since fallen to around $80 a share.
“As was the case when we initially announced the acquisition, Synaptics addresses an important aspect of our strategic direction, and we believe the revised merger agreement represents a more financially attractive transaction for our shareholders,” Chief Executive Officer Hassane El-Khoury said Thursday. Under the new terms, ON expects the deal to be immediately accretive to adjusted earnings per share, with incremental opportunities for revenue synergies and insourcing beyond the initial $200 million in annual run-rate synergies.
The amended agreement also removes a requirement that ON appoint a Synaptics board member. ON agreed to borrow up to $2.45 billion from Morgan Stanley to fund the acquisition. Synaptics shares surged 16% to $122.85 in after-hours trading, while ON shares jumped 6.9% to $85.57.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing