NEW YORK — Fairchild Semiconductor Inc. shares slumped after it said it’s sticking with a takeover offer from ON Semiconductor Corp., even after receiving a higher, unsolicited offer last week.

A group led by China Resources Holdings Co.’s semiconductor arm and Hua Capital Management made a bid for Fairchild Semiconductor on Dec. 8, people familiar with the matter said, valuing the company at $2.46 billion. That followed a November agreement with ON Semiconductor to buy San Jose, California- based Fairchild for $2.4 billion.

Fairchild said the offer from the Chinese group at $21.70 a share wouldn’t necessarily be a “superior proposal,” and that it has not changed its “recommendation in support” of the ON deal, according to a statement Monday.

“Fairchild’s board probably thought they’d get a better-run company if they took the ON offer,” said Kevin Cassidy, an analyst at Stifel Nicolaus & Co.

That would mean taking the lower proposal, he said. Fairchild slumped 2.2 percent to $20.20 at 9:56 a.m. in New York. The shares are up 20 percent this year, compared with a 4.2 percent decline on the Standard & Poor’s Midcap 400 Index.

The semiconductor industry has seen $110 billion in deals this year as companies combine in the face of rising costs of production and a shrinking customer list. China Resource’s takeover offer came amid that country’s efforts to become a national champion in semiconductors.

While Fairchild is one of the oldest suppliers in the industry, it’s been surpassed in scale. The company, which makes semiconductors that regulate power in electronics, chips for cars and electronic signal converters, has annual revenue that’s about a 10th of Texas Instruments Inc., the biggest maker of such products.

Copy the Story Link