UPDATE 1-Opnext turns down $1.40/share offer in favor of Oclaro deal
* Says deemed Oclaro offer as "superior proposal"
* Proceeding with Q3 deal-closing
* Shares up 24 pct
June 4 (Reuters) - Optical components maker Opnext Inc said it turned down an unsolicited buyout offer, choosing instead to proceed with its previously announced merger with peer Oclaro Inc.
The two companies announced a $177 million all-stock deal in March, but Oclaro's share price has more than halved since then.
The Oclaro deal was valued at $1.96 per share when announced in March. But based on Monday's closing price it would yield about 97 cents per share for Opnext shareholders, valuing the company just about $88 million.
However, Opnext said it deemed the $1.40 per share offer from an undisclosed bidder not superior to the Oclaro deal.
It identified the bidder as a technology-focused private equity firm, but added that the offer was subject to due diligence.
"After careful consideration and consultation with its financial and legal advisors and with Opnext management, Opnext's board of directors determined that the offer was not financially more favorable," the company said in a statement.
Both Opnext and Oclaro compete with firms like Finisar Corp and JDS Uniphase Corp.
Opnext said the merger is on track for closing in the third quarter of this year, pending regulatory and stockholder approvals.
Its shares were up 24 percent at $1.20 after market.
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