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Home Tech Electronic-Components Maker II-VI Bids $260 a Share for Coherent

Electronic-Components Maker II-VI Bids $260 a Share for Coherent


Electronic-components maker

II-VI Inc.


IIVI -9.70%

made a roughly $6.5 billion bid for

Coherent Inc.,


COHR 13.75%

setting up a seldom-seen, three-way takeover battle for the laser maker.

II-VI said Friday it offered $260 a share for Coherent, comprising $130 in cash and 1.3055 II-VI shares for each Coherent share.

The Wall Street Journal reported II-VI’s plans earlier Friday.

Coherent already agreed to sell itself to San Jose, Calif.-based

Lumentum Holdings Inc.


LITE 1.51%

for about $226 a share before

MKS Instruments Inc.


MKSI 2.81%

last week made a roughly $240-a-share offer of its own.

Santa Clara, Calif.-based Coherent makes lasers and related products used in medical and scientific equipment, industrial applications and semiconductor manufacturing. Lumentum, MKS and II-VI make similar products.

II-VI, with a market value of about $10.4 billion as of Thursday’s close, is the largest of the three suitors. It is based in Saxonburg, Pa., and makes photonic and electronic materials and components. “Two-Six,” as it is known, refers to groups of elements on the periodic table central to optoelectronics.

II-VI and Coherent have an existing tie: In December, Coherent entered into a supply agreement with II-VI for automotive and electrification welding. II-VI sees the potential for $200 million in cost savings within three years following close of a deal for Coherent, the company said. II-VI purchased Finisar Corp. for $3.2 billion two years ago and said in an earnings report earlier this week that it expects to hit cost-savings targets stemming from that combination a year early.

Coherent on Feb. 8 said it was reviewing Andover, Mass.-based MKS’s unsolicited bid. Should the board deem it superior, Lumentum would have a window to respond with a higher bid.

Lumentum on Jan. 19 agreed to pay $100 and 1.1851 of its shares for each Coherent share, which at the time was worth around $226 a share, or about $5.7 billion. MKS offered $115 in cash and 0.7473 of a share, then worth around $240 or $6 billion.

Based on Thursday’s closing prices, Lumentum’s bid is worth about $210 a share while MKS’s is worth about $237.

Coherent shares had closed at $151.95 before the Lumentum deal was announced. They closed Thursday at $226.80.

Lumentum has argued that its deal is superior to MKS’s despite the lower price because it has a clearer path to regulatory approval and completion. Coherent would owe Lumentum a $217.6 million breakup fee should it walk away from their deal for a better one.

Topping bids are relatively rare in mergers between public companies—especially multiple ones—but happen occasionally, especially in deals with stock consideration when prices change following an announcement and alter the price dramatically. A deal announcement can also jolt companies into action to prevent an asset from ending up in a competitor’s hands.

Last month, a deal by private-equity firm

Apollo Global Management Inc.

and a partner to take ATM maker

Cardtronics

PLC private was scuttled by

NCR Corp.

, which subsequently offered more.

Write to Cara Lombardo at cara.lombardo@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the February 13, 2021, print edition as ‘Laser Firm Coherent Receives Rival Bid.’



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