IMO- the sweetened offer is a joke.
UPDATE 1-Axcelis rejects Sumitomo's sweetened bid
Mon Mar 17, 2008 7:58am EDT
PHILADELPHIA, March 17 (Reuters) - Semiconductor equipment maker Axcelis Technologies Inc (ACLS.O: Quote, Profile, Research) on Monday rejected a sweetened $615.6 million takeover bid by Japan's Sumitomo Heavy Industries Ltd (6302.T: Quote, Profile, Research), saying it undervalued the company and failed to compensate it for the future potential of new products.
Axcelis said it was willing to meet with Sumitomo to discuss their joint venture in Japan, known as SEN. It said it has explored in the past ways to combine Axcelis and SEN, and said it would be willing to meet with Sumitomo to discuss ways to resolve the joint venture relationship.
Although Axcelis said any confidential talks with Sumitomo would "explore all alternatives to the current situation," it did not comment on whether it would be open to talks on a combination of itself, SEN and Sumitomo.
Sumitomo's unsolicited bid "fails to reflect the value of the benefits of SHI's gaining full ownership of SEN," Axcelis said. It said the bid also failed to compensate it for the future potential of its product line and ability to regain market share, which had slipped due to the delay of a new product.
Axcelis, which makes ion implantation equipment used in manufacturing semiconductors, has been trying to regain market share after misjudging the extent and speed with which the semiconductor industry would change to more precise single-wafer tools from batch tools.
Sumitomo and U.S. private equity firm TPG last week raised their bid for Axcelis by 15 percent to $615.6 million or $6 per share to encourage the semiconductor-equipment maker to open talks for a friendly deal. Axcelis closed Friday at $5.59 per share.
According to regulatory filings, Axcelis has strong takeover defenses, such as a shareholder rights plan, that would make a hostile deal costly and difficult. It also has staggered elections for its directors, making it impossible to replace the entire board all at once. (Reporting by Jessica Hall, editing by Gerald E. McCormick) (For more M&A news and our DealZone blog, go to here)
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