SAN JOSE, Calif. - Japanese ATE giant Advantest Corp. has increased its bid to buy rival Verigy Ltd.
U.S.-based Verigy announced that it has received a revised proposal from Advantest to acquire all of the outstanding Verigy ordinary shares for $15.00 per share in cash. The deal is valued at about $900 million.
Earlier this month, Advantest made an unsolicited bid to acquire U.S.-based rival Verigy Inc. for $12.15 per share in cash. That deal is worth $735 million.
The Verigy board said it is not making any recommendation with respect to the revised Advantest proposal at this time.The Verigy board continues to recommend the LTX-Credence merger agreement to its shareholders and is not withdrawing its recommendation to Verigy shareholders in support of the pending merger between Verigy and LTX-Credence or proposing to do so, at this time.
As reported, in a major move in the ATE sector, Verigy has moved to buy rival LTX-Credence Corp. The combined company will be called Verigy. Verigy itself was formerly part of Agilent Technologies Inc. Agilent spun-out the ATE unit several years ago, thereby forming Verigy. Several years ago, LTX Corp. bought ATE rival Credence Systems Corp., forming LTX-Credence.
Now, Advantest wants to buy Verigy, in a move to compete better with rival Teradyne Inc. Advantest is strong in memory test, but lags in logic. Teradyne is strong in both areas.
''Advantest now raising its bid to what we believe shareholders will deem as acceptable, (the) focus now turns to whether a potential merger would pass DOJ anti-trust. We still believe test customers would be unfazed by such a merger, but have no particular insight into how the DOJ would view the combined Verigy/LTX-Credence entity,'' said C.J. Muse, an analyst with Barclays Capital, in a report.
''We note that Advantest's formal offer letter states that this is the company's best and final offer, likely precluding additional raised bids,'' he said.
''Regardless of outcome, we continue to view Teradyne as the clear winner. With dominant share in SOC test combined with growing share in Memory test coupled with world class execution and competitors that may be more focused internally than externally, Teradyne remains our favorite name in test,'' he added.
@Warren: couldn't agree with you more on the comment about DOJ (I wrote something similar on this forum when Advantest made the first bid on Verigy). I too wonder if the proposed merger gets the attention of antitrust regulators particularly in the Europe Union?
If the bid goes thru, I wonder what is left for Teradyne to acquire? The semi test business has endured a brutal period over the last couple of years and the ones left standing are a few.
It is probably better for the industry to remain competitive if the bid does not go thru!
Dr. MP Divakar
Well it looks to me like LTXC would be a very nice addition to Verigy - in terms of a bit of synergistic diversification. On the flip side, teaming with Advantest would really provide a strengthened position in memory test; DOJ opinion on the impact competition in the area of memory test could be quite different from that of Barclays' Muse.
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