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Shares of power chips maker Allegro Microsystems jumped Thursday in intraday trading after it rejected the latest bid by its larger rival ON Semiconductor, also known as Onsemi, describing the offer as "inadequate."
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Onsemi offered $35.10 per share for Allegro, up from a September proposal of $34.50, it said in a statement Wednesday.
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Onsemi CEO El-Khoury said a combined company could create a "diversified leader in automotive, industrial and AI data center applications.”
Shares of power chips maker Allegro Microsystems (ALGM) jumped Thursday in intraday trading after it rejected the latest bid by its larger rival ON Semiconductor (ON), also known as Onsemi, describing the offer as "inadequate."
Onsemi shares slumped.
Onsemi offered $35.10 per share for Allegro, up from a September proposal of $34.50, it said in a statement Wednesday, valuing the smaller company at an implied enterprise value of $6.9 billion, the company said Wednesday. Allegro responded to that offer by saying it had reviewed the bid and “determined that the proposal was inadequate.”
In its statement, Onsemi CEO Hassane El-Khoury said he believed a merger between the two would bring “two highly complementary businesses together.”
“The Allegro team has built an impressive leadership position in magnetic sensing and power ICs for the automotive and industrial end-markets,” he noted, which, combined with onsemi’s technologies could create a "diversified leader in automotive, industrial and AI data center applications.”
Onsemi last month posted fourth-quarter results and missed profit, sales, and guidance estimates as it said it faced difficult macroeconomic conditions. Its shares are down around 5% Thursday and have lost more than 40% of their value in the past 12 months. Allegro shares are up almost 8% Thursday.
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