UPDATE 1-Zygo rejects II-VI's unsolicited offer

* Says company not for sale

* Says shareholders interest in keeping co independent

Feb 16 (Reuters) - The board of Zygo Corp (ZIGO.O) Tuesday unanimously rejected an unsolicited offer made by II-VI Inc (IIVI.O) in early January to acquire all its outstanding common shares for $10 per share. Zygo, which supplies optical metrology instruments, said the company is not for sale.

"The board strongly believes Zygo's shareholders will be best served by keeping the company independent and pursuing its long-term strategy," Chief Executive Chris Koliopoulos said in a statement.

II-VI's cash-or-stock offer valued Zygo at about $170 million, based on about 17 million shares outstanding as on Sept. 30, 2009. [ID:nSGE6060J9]

Zygo shares closed at $10.60 Friday on Nasdaq. Shares of II-VI, which makes optical and electronic instruments, closed at $27.21. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel)