Coherent Inc said on Monday it had received a $6 billion takeover offer from manufacturing devices maker MKS Instruments Inc, weeks after the laser manufacturer agreed to a deal from Lumentum Holdings.
Coherent shares jumped 16% on the news in early trading, while MKS slipped 5%.
MKS, which primarily generates revenue from sale of its products to semiconductor device manufacturers, said its move was aimed at grabbing a bigger share of the fast-growing laser and photonics market.
Its cash-and-stock offer values Coherent shares at $240 apiece, representing a premium of about 24% to the stock’s Friday close.
MKS said its offer represents a premium of 16% to Lumentum’s proposal and includes a cash component of $115 compared to $100 in Lumentum’s offer.
The company also said it expects $180 million in cost savings within three years after the deal closes.
Coherent said its board had determined that MKS’ proposal could lead to a deal that is superior to its pending transaction with Lumentum and it would engage in further talks with MKS.
Coherent, however, continues to recommend its merger agreement with Lumentum to its stockholders.
Last month, optical fiber specialist Lumentum Holdings Inc agreed to a $5.7 billion deal with Coherent where the company’s stockholders were to receive $100 per share in cash and 1.1851 shares of Lumentum common stock for each share held.
“We believe our transaction is superior,” Lumentum said in a statement, adding that its deal has a clear path to regulatory approval and it remained committed to closing the deal in the second half of the year.
Source: Reuters.com