Switching to $123 in cash after a rival approach lowered the headline price but raised what target shareholders actually receive. Both stocks rallied after hours.
The headline makes it look like a price cut. onsemi's agreement to buy Synaptics is now valued at about $5.7 billion, down from roughly $7 billion when the deal was struck in June. Yet Synaptics shares jumped about 15% after hours on Thursday, to $122.10, and onsemi rose about 7%.
The explanation lies in what the original deal was actually worth by this week. The June agreement was all stock, at a fixed 1.350 onsemi shares for each Synaptics share. When it was signed, onsemi closed at $118.74, so the ratio was worth about $160 a Synaptics share. By Thursday's close, onsemi had fallen to $80.08, and the same ratio was worth about $108. The amended terms pay $123 in cash, roughly 13.8% more than the stock deal was worth at the last close.
So both sides can claim a win. Synaptics holders swap a shrinking stock claim for a fixed cash amount above it. onsemi avoids issuing about 52.7 million new shares, roughly 13.5% dilution, and now expects the acquisition to add to non-GAAP earnings per share immediately upon closing rather than within 18 months.
"The all-cash transaction delivers higher value to our shareholders through lower total cost consideration," onsemi Chief Executive Hassane El-Khoury said. Synaptics Chief Executive Rahul Patel said the structure provides "value certainty at a meaningful premium as compared to current value."
The rival in the background
The new terms followed an unsolicited, non-binding proposal Synaptics received on Sept. 2 from a strategic party that has not been publicly identified. Synaptics' board, working with a special committee, at one point judged that proposal, as revised, to be a "Superior Proposal." After further talks with onsemi, the board concluded it no longer was and unanimously approved the amended agreement.
onsemi has secured a commitment from Morgan Stanley for up to $2.45 billion of senior secured term loans, and the deal carries no financing condition. U.S. antitrust clearance under the Hart-Scott-Rodino Act is already in hand; other antitrust and foreign-investment approvals remain, along with a vote of Synaptics shareholders. Closing is still expected by mid-2027, and onsemi guides net leverage below 2.0 times.
What the spread says
At $122.10, Synaptics traded about 0.7% below the cash price for a deal that will not close for roughly nine months. A spread that thin usually means the market sees little risk of failure and assigns some chance to a higher bid. The original agreement allowed Synaptics to terminate for a superior offer subject to onsemi's matching rights and a $235 million break fee.
What to watch: Friday's first regular session. If Synaptics trades at or above $123, arbitrageurs are betting the contest is not over. Synaptics' revised proxy, which should describe the rival's approach in detail, is the next document that could change the calculus.