Coherent, Inc. (NASDAQ:COHR), which announced a purchase agreement with Lumentum (NASDAQ:LITE) January 19, 2021, says it has received an unsolicited counteroffer from MKS Instruments, Inc. (NASDAQ: MKSI). The offer proposes $115.00 in cash and 0.7473 of a share of MKS common stock in exchange for each share of Coherent common stock. Coherent and Lumentum had agreed to $100.00 in cash and 1.1851 shares of Lumentum common stock for each share of Coherent’s common stock (see "Lumentum to buy Coherent to expand laser and photonics reach").
Coherent’s board says it has not fully appraised the merits of the new offer – but has scrutinized it enough to determined that the offer has the potential to meet the qualifications of a “superior offer” under the definitions established in the purchase agreement with Lumentum. Therefore, the board says it will further discuss the new offer with MKS. The evaluation process will encompass risks and other aspects beyond the difference in potential sales price. As the evaluation is ongoing, Coherent’s board for now continues to recommend continuation of the merger agreement with Lumentum to its stockholders.
Lumentum, not surprisingly, thinks that’s a good idea. "The combination of Lumentum and Coherent will create a leading photonics technology company and will deliver compelling strategic and financial benefits to both companies' stakeholders," said Alan Lowe, Lumentum president and CEO, via a statement. "We believe our transaction is superior. In contrast to the proposal by MKS Instruments, the Lumentum-Coherent transaction has a clear path to regulatory approval and completion, and Lumentum remains committed to closing the transaction in the second half of the year. We look forward to uniting two global industry leaders -- with complementary businesses -- to accelerate photonic innovation and pursue exciting new growth initiatives to the benefit of our respective customers, employees and stockholders."
As its name implies, MKS Instruments, Inc. (NASDAQ: MKSI) provides instruments, systems, subsystems, and process control products for manufacturing applications. It lists as core competencies pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, lasers, photonics, optics, precision motion control, vibration control, and laser-based manufacturing. It owns such brands as Newport, Spectra-Physics, and Ophir.
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