Kemet rejects latest Vishay bid

Electronic News, July 29, 1996

Malvern, Pa.--Kemet Electronics rejected a new acquisition offer from Vishay Intertechnology valued at more than $850 million, Vishay indicated last week, as the takeover drama between the passive component firms continues.

In his first public comment since proposing friendly acquisition discussions several weeks ago (EN, July 1), Vishay chairman Felix Zandman last week said the board of Kemet rejected Vishay's most recent proposal to acquire all of the outstanding shares of Kemet for approximately $22 per share in a merger transaction. A deal at $22 could be worth in the $850 million to $860 million plus range. Exactly how this offer transpired was not revealed.

In a statement issued by Vishay, Dr. Zandman added: "We remain ready to proceed with negotiations if and when Kemet's board of directors, management and stockholders come to realize what we know to be the case--that our proposal to merge makes excellent sense in this economic environment and would benefit both companies." No mention was made of any possible hostile efforts should Kemet's board hold firm.

Kemet's board has previously said it does not want to talk to its capacitor rival. Kemet held its annual shareholders meeting last week, but no major new positions emerged. Kemet's news release on the meeting did not make any reference to Vishay.

In the Kemet release, David Maguire, Kemet chairman/CEO, was said to have reported at the meeting that increased use of surface mount components and higher speed circuits will spur Kemet's continued growth. "Although the current market for capacitors is depressed because of inventory overhang, we believe the fundamentals to propel our growth are unchanged," Mr. Maguire said. "Electronics remains a growth industry, and capacitors are essential to all electronic equipment. Kemet is focused on the fastest growing segments of the capacitor industry--tantalum and ceramic surface mount capacitors."

He added, "We just opened a new ceramics surface mount capacitor plant in Monterrey, Mexico, last week and are halfway through the establishment of a new ceramics technology center at our Fort Inn, S.C., facility. We believe these facilities will help us insure the rapid introduction of new ceramic surface mount products, a market over twice the size of the tantalum market. We are already scaling up for a new fifth generation ceramic capacitor manufacturing system and are very optimistic about its potential."

Kemet has been hit with a shareholder suit over its response to Vishay's offer. Kemet has termed the suit without merit and vowed to defend itself and its directors vigorously (EN, July 22).