It’s rare that news of an investigation of any sorts, especially maleficence, generates a gain of nearly 50%. It doesn’t happen that way. It didn’t. News of an investigation of Cymer played second fiddle today to news that it would be acquired by Dutch chip-equipment giant ASML (NASDAQ: ASML) in a deal worth over $2.55 billion.
ASML essentially declared with its offer today that it is making the move to speed up the development of extreme ultraviolet semiconductor lithography, a technology that is essential in the minds of many industry analysts’ and electrical engineers as the latter looks to develop the next generation of mobile phones, tablets and other devices.
“We believe that this transaction will improve our capabilities to bring new technologies to our customers, and will deliver value to Cymer’s and ASML’s shareholders,” said ASML President and CEO, Eric Meurice. Insiders and the market might argue this statement given ASML’s performance today. Its stock dropped $3.51, over 6.5% on the day.
The aforementioned other side of the coin was a different matter altogether. Cymer’s shareholders will receive $20 for each share they are holding in addition to 1.15 shares in ASML. This represents a premium of over 60% in spite of ASML’s 6.5% drop in today’s trading.
While the “Street” seems to feel that this purchase is too much of an outlay for the Dutch giant, Cymer’s shareholders will be hard-pressed to view today as anything but a windfall.
ASML and Southern California-based Cymer have both been working on EUV technology, but progress has been slow.
“Combining the two companies will definitely speed up the development of this EUV (extreme ultraviolet) source,” said Chief Financial Officer Peter Wennink.”
While the deal, which is expected to close in early 2013, seems sound, there are hints of anti-trust concerns. Nikon is a staunch competitor of ASML in EUV technologies, yet has been a customer of Cymer for a number of years.
In addition to this anti-trust concern, Robbins Umeda, a nationally recognized leader in securities litigation and shareholder rights law, has suggested that a class action suit may be in the offing as they hinted at the fact that members of Cymer’s board may not have done a sufficient job shopping their company prior to the announcement of today’s acquisition by ASML. It is Robbins Umeda’s intention to launch a detailed investigation.
As is often the case with announcements and acquisitions of this sort, Levi & Korsinsky quickly joined Robbins Umeda. They announced their intention to seek more money for shareholders of Cymer as well. Not to be outdone, Faruqi & Faruqi intends to also recoup additional “losses” for shareholders who would join their class action suit.
These three firms will not be the last to investigate Cymer’s board for “allowing” the company to be acquired today.
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