Synaptics Said to Shun $110-a-Share Bid From China Investor

  • Proposal reflects 70% premium to Synaptics close Tuesday
  • Company makes touch-screen technology for Samsung, Apple

Synaptics Inc., the maker of touch-screen technology used in phones, tablets and computers, rejected an offer from a state-backed Chinese investment group that valued the company at almost $4 billion, people with knowledge of the matter said.

The group bid $110 per share for San Jose, California-based Synaptics, said the people, who asked not to be identified because the information is private. That reflects a 70 percent premium to the company’s closing share price Tuesday. Synaptics isn’t interested in selling at that level, one of the people said, and may be holding out for as much as $125 a share. Talks between the buyer and Synaptics are ongoing, the people said.

Synaptics rose 12 percent to $72.57 at 11:05 a.m. New York time, after jumping as much as 26 percent, its largest one-day gain since June 2014. Shares have fallen 5.9 percent this year through Tuesday.

The approach by the Chinese investors is the latest in a series of attempts by organizations from the country to acquire U.S.-based semiconductor operations. A successful bid would add Synaptics to the list of chip companies bought by China as president Xi Jinping drives the country toward technology independence. China, the biggest market for chips, is trying to improve domestic technology so it can provide more of the country’s needs. About 10 percent of its supplies currently come from Chinese producers.

Beijing-based Hua Capital Management Co. led a $1.9 billion bid for Omnivision Technologies Inc., while a unit of China’s prestigious Tsinghua University has bought U.S.-listed Spreadtrum Communications Inc. and RDA Microelectronics Inc. Tsinghua also said today it’s acquired 15 percent of Irvine, California-based hard-drive maker Western Digital Corp. for $3.8 billion.

Rising Sales

Synaptics’ revenue has surged along with the increasing use of mobile devices and the addition of touch to traditional computers. The company is projected by analysts to report a sales jump this year of 53 percent, according to the consensus of estimates compiled by Bloomberg. That would make 2015 the third consecutive year of growth above 50 percent.

Still, the company’s shares have dropped to less than $70 this month from more than $100 in June, pressured by forecasts that global sales of personal computers and mobile phones will slow. The company has a market value of about $2.8 billion.

Samsung Electronics Co. is Synaptics’ largest customer, according to Bloomberg supply-chain analysis. Synaptics also supplies Apple Inc.

An offer from a Chinese entity may need approval from the Committee on Foreign Investment in the U.S. in order for a deal to pass regulatory scrutiny.

Synaptics doesn’t comment on rumors or speculation, Chief Executive Officer Rick Bergman said when reached by phone.

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