ON Semiconductor Cuts $5.7B All-Cash Deal for Synaptics at $123 a Share, Replacing Original $7B Stock Offer

ON Semiconductor reached an amended $5.7 billion agreement to acquire Synaptics at $123 per share in cash, replacing the all-stock transaction the two companies had agreed to on June 25. The revision was triggered by an unsolicited competing proposal for Synaptics, prompting both parties to restructure the terms to a simpler, fully cash-funded bid.

Synaptics shares surged roughly 14% in morning trading while ON Semiconductor climbed as much as 8%, reaching $86.64, a reaction that reflects investor relief at the removal of share dilution risk the original stock deal carried. Bank of America said the revised structure could deliver a larger earnings boost than the earlier agreement had implied, precisely because it eliminates the dilution that had weighed on onsemi's equity.

Not all reaction was positive. Synaptics received a downgrade from at least one analyst on October 2, and law firm Halper Sadeh LLC announced it is investigating whether the $123-per-share price is adequate for Synaptics shareholders, citing potential concerns about whether the board fulfilled its fiduciary duties in the sale process.