Why ON Semiconductor stock rose after it switched the Synaptics deal from stock to $123 in cash

ON Semiconductor stock rose 4.309% in the first minute after the company and Synaptics announced an amended merger agreement at 4:34 p.m. ET on Thursday, October 1, 2026, from a reference level of $80.53. The amendment replaced the all-stock terms signed on June 25, 2026 with $123 per Synaptics share in cash, and the companies said it followed an unsolicited competing proposal from a third party. Fifteen minutes after the headline the stock was at $83.44, 3.61% above that level.

What changed between the June and October terms

The two headline values are the companies' own figures, taken from the June 25 and October 1 releases. The June number was described as a total enterprise value and reflected a 19% premium based on average prices over the ten trading days before that announcement. The October number is described as an aggregate value at a fixed cash price.

Why ON Semiconductor stock rose on a cash deal for Synaptics

A fixed exchange ratio pays the seller in the buyer's shares, so its worth moves with the buyer's share price every day until closing. At the $80.53 reference level for ON stock just before the announcement, 1.350 onsemi shares were worth $108.72. The cash price of $123 sits about 13.1% above that figure. Synaptics owners therefore received a higher and fixed amount compared with what the old ratio was worth at that moment, even though the companies' stated total fell from about $7 billion to about $5.7 billion.

For onsemi's owners the change removes the new shares the June agreement would have created. Under the stock terms, every Synaptics share would have become 1.350 onsemi shares, spreading onsemi's future earnings across a larger share count. Under the cash terms the share count stays where it is and the cost becomes a fixed dollar amount funded partly with debt. onsemi said in the October 1 release that the all-cash structure delivers higher value to its own shareholders through lower total consideration, and that it expects the transaction to add to non-GAAP earnings per share immediately.

The switch also changes how merger funds are positioned. In a stock-for-stock merger, funds that trade the spread between the two companies typically own the target and carry an offsetting bearish position in the acquirer, sized by the exchange ratio. With cash consideration that offsetting position has no function and gets closed. That is consistent with a rise in ON stock in the first minute after the headline, although the measured data cannot attribute the move to any single group of traders.

What the rival proposal changed for each side

1. June 25, 2026: onsemi and Synaptics signed a definitive all-stock agreement at 1.350 onsemi shares per Synaptics share.
2. Between June and October 2026: Synaptics received an unsolicited competing proposal from a third party. The companies did not name the party or disclose its terms in the October 1 release.
3. October 1, 2026: onsemi and Synaptics amended the agreement to $123 per share in cash. The amended agreement carries no financing condition.

A competing proposal gives a target's board a comparison point, and cash is the simplest form of consideration to compare because it does not depend on the buyer's future share price. By moving to cash, onsemi gave Synaptics' board a certain number to weigh against the third party's offer. The cost to onsemi is balance-sheet risk: it takes on debt and carries the full exposure to Synaptics' business, where the June terms would have shared that exposure with former Synaptics owners through their new onsemi stock. Synaptics owners give up participation in the combined company in exchange for a fixed price.

The companies said the transaction has been cleared by the United States Federal Trade Commission, that regulators in other jurisdictions are still reviewing it, and that it remains subject to a vote of Synaptics shareholders.