Fairchild Semiconductor International Inc plans to say that a revised takeover proposal from a group led by China Resources Holdings Co (華潤集團) and Hua Capital Management (華資本管理公司) is now likely to lead to a superior offer for the company, people familiar with the matter said.
A statement from the US semiconductor company would open the doors for the two groups to start talking to each other, the people said, asking not to be identified as the matter is private.
Fairchild, which agreed to a merger in November with ON Semiconductor Corp, last week said it received a revised, unsolicited acquisition offer of US$21.7 per share in cash from a bidder identified as “Party G” — the same group as the one led by China Resources’ semiconductor arm, a person familiar with the matter said at the time.
The revised offer would value the firm’s equity at US$2.46 billion.
A China Resources spokesman declined to comment, while representatives for Fairchild did not respond to requests for comment outside of regular business hours.
If the China Resources-led group and Fairchild reach an agreement, ON Semiconductor could choose to push the bidding higher, according to Christopher Rolland, an analyst at FBR & Co.
“We believe there is a meaningful probability that ON Semiconductor will raise its bid to [US]$22 and perhaps higher,” Rolland wrote in a note to clients on Dec. 30.
On Dec. 14, Fairchild rejected an earlier China Resources bid as not necessarily a “superior proposal” to the merger agreement with Phoenix-based ON Semiconductor. In the revised proposal, Party G offers to pay the US$72 million that Fairchild would owe ON Semiconductor as a breakup fee if it canceled the merger agreement, according to the filing.
Additionally, the group provided a debt commitment letter from JPMorgan Chase & Co.
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