Novellus interested in SFAM. Check out the last Paragraph.From the LRCX thread.
From Bloomberg:
Lam Research Rises; Analyst Says Novellus May Buy It (Update1)
Lam Research Rises; Analyst Says Novellus May Buy It (Update1) (Adds analyst comments, details. Updates share prices.)
Fremont, California, April 1 (Bloomberg) -- Shares of Lam Research Corp., a semiconductor-equipment maker, surged as much as 24 percent after Merrill Lynch & Co. analyst Mark Fitzgerald said Novellus Systems Inc. may acquire the company.
Lam rose 3 1/2 to 32 1/2 in midday trading of 3.6 million after touching 36 earlier. The stock has gained 88 percent this year. Novellus rose 1 3/4 to 56 7/8.
Both Novellus and Lam make equipment used to manufacture semiconductors and their combination would create a stronger competitor to Applied Materials Inc., the No. 1 chip-equipment maker. Novellus equipment deposits thin layers of metal and insulation on silicon wafers while Lam machines etch those layers into microscopic chip wires, processes that could streamlined if the companies teamed up. ''Applied is taking significant market share. By getting together Lam and Novellus can offset some of that competitive advantage,'' Fitzgerald said in an interview.
Fitzgerald said Lam could fetch as much as $40 a share. That would value an acquisition at about $1.54 billion, not including $350 million of Lam's convertible debt.
Novellus, based in San Jose, California, declined to comment. Lam, based in Fremont, California, was unavailable.
Speculation
Fitzgerald' said ''a recent sequence of events'' including a share offering by Novellus that raised about $300 million has increased speculation that Novellus may be preparing to buy Lam. ''No one at the company told me anything (about a possible acquisition),'' said Fitzgerald, who said he doesn't have ''an insider'' saying that Novellus is going to buy Lam.
Lam Research has been considered a potential takeover target for Novellus for the past five years, analysts said. Lam struggled during a slump in chip-equipment orders last year and cut half of its workforce. ''Novellus has to turn itself into a multiple-tool company like Applied to be competitive,'' said Needham & Co. analyst Theodore O'Neill, who rates both Novellus and Lam ''buy.''
Novellus is likely to make an offer for Lam, though not until the end of the year, Needham & Co.'s O'Neill said.
Novellus probably would be hesitant to buy the company until Lam stops losing money, O'Neill said. He estimates that Lam will break even in the second quarter of fiscal 2000, which ends in December. ''You can't know what you're buying yet,'' he said.
Acquisitions
Lam itself bought OnTrak Systems Inc. for $400 million in stock in August of 1997.
Elsewhere in the equipment business, SpeedFam International Inc. agreed to buy Integrated Process Equipment Corp. in November, a transaction expected to be completed this month. The merged company also is considered a possible target for Novellus, which may want to acquire its metal-polishing tools.
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