onsemi Recommends Stockholders Reject Below-Market Mini-Tender Offer by TRC Capital Investment Corporation

Rhea-AI Summary

ON Semiconductor (ON) has received an unsolicited mini-tender offer from TRC Capital Investment , offering to purchase up to 1.5 million shares of ON's common stock at $70.75 per share, 4.4% lower than the previous closing price. Investors are advised to be cautious and seek current market quotations before taking any action.

Insights

Financial Analyst

The unsolicited mini-tender offer by TRC Capital Investment for ON Semiconductor Corporation's shares is a notable event for investors and the company alike. The offer price is set below the recent closing share price, which suggests a potential undervaluation of onsemi's stock. Investors should be aware that such offers might seem attractive but could reflect an opportunistic attempt to acquire shares at a discount.

It's essential to scrutinize the offer's terms, especially since mini-tender offers are subject to fewer regulations than larger bids, potentially posing higher risks to uninformed shareholders. The recommendation by onsemi for investors to seek advice and compare the offer price with the market value is sound, emphasizing the need for due diligence.

Furthermore, the fact that TRC Capital Investment has a history of making similar offers could indicate a pattern in their investment strategy, which might impact the trading dynamics of onsemi's stock. While the offer represents a small percentage of the outstanding shares, it could still influence investor sentiment and the stock's market liquidity.

Securities Lawyer

From a legal perspective, the mini-tender offer by TRC Capital Investment raises several points of interest. Mini-tender offers are generally not subject to the same strict regulatory requirements as larger tender offers, which is why the SEC issues cautionary advice regarding them. This lack of regulation can lead to less transparency and fewer protections for shareholders.

onsemi's proactive stance in urging shareholders to consult with financial advisors and to carefully consider the offer is a prudent measure to help protect their interests. The company's request for brokers and dealers to review the SEC's guidance on mini-tender offers further underscores the importance of informed decision-making in these situations.

Shareholders should also be aware of their rights to withdraw tendered shares before the offer's expiration. This flexibility is important in case market conditions change or if investors reassess the value proposition of the mini-tender offer in light of new information.

Market Research Analyst

Analyzing market trends, the mini-tender offer for onsemi's shares could be seen as a strategic move by TRC Capital Investment to capitalize on potential undervaluation. However, the impact on the market depends on the response from onsemi's shareholders. If many investors find the offer appealing and choose to tender their shares, this could lead to a temporary dip in the company's stock price due to perceived market sentiment.

Conversely, if the majority of shareholders heed onsemi's advice and reject the offer, it could reinforce investor confidence in the company's valuation and stability. The offer's outcome might also serve as a signal to the market about the shareholders' perception of the company's future prospects and inherent value.

It's important to monitor the market's reaction to such offers, as they can sometimes precede more significant corporate actions or indicate broader investor attitudes towards the company and its industry sector.

 

SCOTTSDALE, Ariz.--(BUSINESS WIRE)-- ON Semiconductor Corporation (Nasdaq: ON) (“onsemi”) disclosed today that it has received notice of an unsolicited mini-tender offer by TRC Capital Investment Corporation, an Ontario corporation (“TRC Capital Investment”). onsemi is not affiliated or associated in any way with TRC Capital Investment, its mini-tender offer or its offer documentation.

The offer is for the purchase of up to 1.5 million shares of onsemi’s common stock at a price of $70.75 per share, approximately 4.4% lower than the $74.04 closing share price of onsemi’s common stock on March 19, 2024, the trading day immediately prior to the date of the offer. The offer represents approximately 0.35% of the shares of onsemi’s common stock outstanding as of the March 20, 2024 offer date.

onsemi urges investors to obtain current market quotations for their shares, to consult with their broker or financial advisor, and to exercise caution with respect to TRC Capital Investment’s offer. onsemi recommends that stockholders who have not responded to TRC Capital Investment’s offer take no action. Stockholders who have already tendered their shares may withdraw them at any time prior to the expiration of the offer, in accordance with TRC Capital Investment’s offer documentation. The offer is currently scheduled to expire at 12:01 a.m. EDT on April 19, 2024. TRC Capital Investment may extend the offering period at its discretion.

onsemi encourages brokers and dealers, as well as other market participants, to review the U.S. Securities and Exchange Commission’s (“SEC”) letter regarding broker-dealer mini-tender offer dissemination and disclosure at www.sec.gov/divisions/marketreg/minitenders/sia072401.htm. The SEC has cautioned investors that some bidders making mini-tender offers at below-market prices are “hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price.”

TRC Capital Investment has made many similar mini-tender offers for shares of other companies. Mini-tender offers seek to acquire less than 5% of a company’s shares outstanding, thereby avoiding many disclosure and procedural requirements of the SEC that apply to offers for more than 5% of a company’s shares outstanding. As a result, mini-tender offers do not provide investors with the same level of protections as provided for larger tender offers under U.S. securities laws.

onsemi requests that a copy of this news release be included with all distributions of materials relating to TRC Capital Investment’s mini-tender offer related to shares of onsemi’s common stock.

About onsemi

onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. onsemi offers a highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve the world’s most complex challenges and leads the way to creating a safer, cleaner and smarter world. onsemi is recognized as a Fortune 500^® company and included in the Nasdaq-100 Index^® and S&P 500^® index. Learn more about onsemi at www.onsemi.com.

onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240402355860/en/

Krystal Heaton

Director, Head of Public Relations

onsemi

(480) 242-6943

Krystal.Heaton@onsemi.com

Parag Agarwal

Vice President, Investor Relations & Corporate Development

onsemi

(602) 244-3437

investor@onsemi.com

Source: onsemi

FAQ

What is the mini-tender offer ON Semiconductor (ON) received?

ON Semiconductor (ON) received an unsolicited mini-tender offer from TRC Capital Investment to purchase up to 1.5 million shares of ON's common stock at $70.75 per share.

What is the price per share offered in the mini-tender offer?

The price offered per share in the mini-tender offer is $70.75, which is approximately 4.4% lower than the closing share price of $74.04 on the previous trading day.

When does the mini-tender offer expire?

The mini-tender offer is currently scheduled to expire at 12:01 a.m. EDT on April 19, 2024, with the possibility of extension at TRC Capital Investment's discretion.

What cautionary advice does ON Semiconductor (ON) provide regarding the mini-tender offer?

ON Semiconductor (ON) advises investors to seek current market quotations for their shares, consult with their broker or financial advisor, and exercise caution with respect to TRC Capital Investment's offer.

What does the U.S. Securities and Exchange Commission (SEC) caution investors about mini-tender offers?

The SEC cautions investors that some bidders making mini-tender offers at below-market prices may catch investors off guard if they do not compare the offer price to the current market price.