* Offers $12.15/share, or 33 pct premium
* Verigy says offer not superior, but to talk to Advantest
* LTX says deal with Verigy remains in effect
* Verigy shrs up 36 pct; LTX shrs down 15 pct
(Recasts; adds analysts' comments, details, updates shares)
By Himank Sharma
BANGALORE, Dec 6 Semiconductor testing firm
Verigy Ltd VRGY.O said it received a $728.8 million buyout
offer from Tokyo-based Advantest Corp (6857.T) ATE.N, three
weeks after the takeover target had agreed to acquire smaller
rival LTX Credence LTXC.O in an all-stock deal.
Advantest's offer of $12.15 a share represents a premium of
about 33 percent to Verigy's Friday's close on Nasdaq.
However, investors expecting a better deal bid up Verigy
shares as much as 36 percent on Monday morning. They were
trading at $12.40 midday, after touching a high of $12.42.
Cupertino, California-based Verigy said the latest offer is
not superior to its pending transaction with LTX
[ID:nSGE6AH0I2], but said it could lead to a superior
transaction and that it will engage in discussions with
DA Davidson analyst Thomas Diffely told Reuters that
Advantest would come back with a higher bid, potentially
breaking the LTX deal as the Japanese company is unlikely to
buy the combined entity.
"We would argue that the combined company is worth more,
but maybe Advantest does not want to pay that much money. Maybe
it cannot afford to," Diffely said.
Separately, LTX-Credence said its $424.4 million merger
agreement with Verigy remains in effect.
Advantest, which counts Intel Corp (INTC.O) as a customer
for its memory testing equipment, was not immediately available
Stifel Nicolaus analyst Patrick Ho said if the Verigy deal
goes through, Advantest would get access to the fast-growing
system-on-chip (SoC) market, in addition to its memory testing
"We believe an acquisition of Verigy would strongly
position Advantest as the second leading SoC test supplier
behind Teradyne," he said in a note.
Semiconductor makers rely on companies such as Verigy,
Advantest and Teradyne Inc (TER.N) to test the efficiency and
quality of their chips.
Analyst Diffely said although there is a bit of an overlap
between the two companies' current product ranges, Advantest
aims to achieve higher scale for its SoC product through the
Shares of Advantest, with a market value of about $4.28
billion, were down 2 percent at $21.35 on the New York Stock
LTX-Credence shares fell as much as 15 percent, making the
stock one of the biggest losers on Nasdaq. They were down 12
percent at $7.40.
(Reporting by Himank Sharma; Editing by Unnikrishnan Nair)