Tuesday, March 22, 2011
ATE vendor Verigy Inc. appears to be dumping LTX-Credence Corp. in favor of being acquired by Japan's Advantest Corp.
As reported, Verigy has recently moved to buy rival LTX-Credence. Then, late last year, Japanese ATE giant Advantest increased its bid to buy rival Verigy. 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.
For some time, Verigy was mulling Advantest's offer. On Monday (March 21), Verigy said it has notified LTX-Credence that the Verigy board of directors intends to withdraw its recommendation in favor of the pending merger transaction between Verigy and LTX-Credence and intends to recommend that Verigy stockholders vote against the issuance of Verigy ordinary shares in connection with the proposed merger with LTX-Credence.
Verigy also announced that its board has unanimously determined that a proposal from Advantest to acquire all of the outstanding Verigy ordinary shares for $15.00 per share in cash constitutes a "superior offer" within the meaning of the definitive merger agreement between Verigy and LTX-Credence previously announced on Nov. 18, 2010.
''There is no assurance that the proposed transaction with Advantest will be completed. Verigy does not have a unilateral right to terminate the LTX-Credence merger agreement in order to accept the Advantest proposal and enter into a definitive agreement with Advantest, even if LTX-Credence declines to make a proposal on or prior to the close of business on March 25, 2011 and the Verigy board thereafter formally withdraws its recommendation in favor of the proposed merger transaction between Verigy and LTX-Credence,'' according to Verigy.
If Advantest buys Verigy, this would leave LTX-Credence on the outside looking in. LTX-Credence would remain a standalone ATE player, although it is a weak vendor. It's unclear if LTX-Credence could survive over the long run as a standalone player.
On paper, the Advantest-Verigy deal makes sense. Advantest needs to expand its digital/logic ATE efforts. Verigy is strong in digital ATE. Advantest is a smaller player in the arena, although it is a largest installed base at Intel Corp.
All ATE vendors are trailing Teradyne Inc., which continues to gain steam in logic, memory and other markets.
By: DocMemory
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