Hi Steve,
Well ,they bought Gasonics-but that was a stock swap.
Let's do a little scratching on the bar napkin.
800,000,000 divided by the stock price(with a touch of premium(50.00)=1,600,000 new shares.I don't know what the specifics of the 144a are so this is just guessing.Nvls has 142,452,498 shares outstanding so this dilution would only be about 1.12 % not a big deal.
So who are the possible targets ?
Sfam - 30,116,409 shares outstanding.All they've done in the last 3 years is bleed red ink and it is flowing BIG TIME this year <$2.89> in three quarters.Price of the stock has bottomed at 3 with 6 being the high of the last decent rally this year. Ten bucks would be a gift to stockholders.This purchase would be bottom feeding and a value play.Might be very shrewd.BWDIK
This transaction would only take up less than half the money being issued and that would be paying a huge premum.It looks to me like the offering is too big for this transaction even if they paid all cash(and it seems they like to use their stock - the price of the stock has done relatively well of late - so at a bottom where value is to be had - they can do well with stock here)
Keep in mind their preference is to pay with stock -as their track record with Gasonics (In January) suggests.
Let's look at Lam Research:
123,623,978 shares outstanding @ say a nice premium of 40= 4.9 billion. Here 800 million looks small.So if they did a stock swap of equals the 800 million cash might be what they need to reorganize.
Novellus itself has 142,452,498 shares outstanding.
I guess it is time to harness the wealth of SI.
Did anyone out there own KLA or Tencor stock back when they merged.As I recall it was at the bottom of a cycle and resulted in very favorable acceptance. Rather than fight on price they joined and became an industry leader.
With Amat being the 800 pound Gorilla here - a combination of Lam and Novellus makes a lot of sense.
One sign i've been looking for in this cycle is a consolidation or merger activity.This 144A is adding a lot of excitement and may be the beginnings of our favorite stock moving up into the BIG BOYS LEAGUE ?????
I for one would like to see 800 million in the bank and a merger of equals with LRCX. Nvls being a tad bigger and take in Lam into the fold as the combination yields a more diverse competitor to Amat.
An analysis of the stocks shows an incredible linkage already. Nvls and lrcx have been in a lock step for months and sfam has plummeted into the bargain basement.
:http://www.siliconinvestor.com/research/comp_chart.gsp?s=LRCX+nvls
It all adds up to a good mystery and the world heard about it here first.
Great sleuthing going on out there - shows the value of SI.
BWDIK
Bob
P.S. my vote goes for Lam |
