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Vishay Intertechnology Prices Offering Of $150 Million Of 2.25% Convertible Senior Debentures

Vishay Intertechnology, Inc. (NYSE: VSH) today announced the pricing of its offering of $150 million principal amount of 2.25% convertible senior debentures due 2042. The debentures were offered and sold only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The sale is expected to close May 31, 2012.

Interest will be payable on the debentures semi-annually at a rate of 2.25% per annum. In addition to ordinary interest, beginning on June 1, 2022, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances. The debentures will be initially convertible, subject to certain conditions, into cash, shares of Vishay’s common stock or a combination thereof, at Vishay’s option, at an initial conversion rate of 84.6937 shares of common stock per $1,000 principal amount of debentures. This represents an initial effective conversion price of approximately $11.81 per share. This initial conversion price represents a premium of 13.75% to the closing price of Vishay’s common stock on May 29, 2012, which was $10.38 per share.

Vishay may not redeem the debentures prior to June 7, 2022, except in connection with certain tax-related events. On or after June 7, 2022 and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption.

Vishay intends to use the net proceeds from this offering, together with cash on hand, to repurchase shares of its common stock for an aggregate purchase price of $150 million as follows:
  • Approximately $100 million to repurchase shares of Vishay’s common stock through an initial purchaser or its affiliate which, acting as Vishay’s agent, will purchase shares of Vishay’s common stock from institutional investors in negotiated transactions concurrently with the pricing of this offering. Such repurchases may raise or maintain the market price of Vishay’s common stock above levels that would otherwise prevail or prevent or slow a decline in the market price of Vishay’s common stock; and
  • Approximately $50 million to repurchase additional shares of Vishay’s common stock through an agreement with an initial purchaser or its affiliate concurrently with the pricing of this offering. Pursuant to the terms of such repurchase, concurrent with the closing of this offering, the counterparty to such agreement will sell short to us shares of Vishay’s common stock. As a result of such short sale, concurrently with, and for a period of time following, the pricing of the debentures, Vishay expects the counterparty to such agreement (or an affiliate thereof) to purchase shares of Vishay’s common stock from third parties and/or enter into various derivative transactions with respect to Vishay’s common stock. The effect, if any, of any of these transactions and activities on the market price of Vishay’s common stock and/or the debentures will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could have the effect of increasing or preventing a decline in the price of Vishay’s common stock and the debentures, concurrently with the pricing of the debentures and for a period of time following such pricing.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The debentures and any shares of Vishay’s common stock that may be issued upon conversion of the debentures have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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