ASM Rejects Applied Materials, Again

ASM International (ASMI) today rejected a joint bid from Applied Materials (AMAT) and Francisco Partners for the company’s front-end semiconductor tool business as too low. The company asserted that the offer “significantly undervalues” the businesses involved and “fails to reflect its future prospects.”

This is the second time ASM has rejected AMAT’s bid. The first time, AMAT offered $400 million to $500 million for ASM’s Atomic Layer Deposition and Plasma Enhanced Chemical Vapor Deposition units. After that offer was rejected, it came back with a new bid, this time with Francisco. AMAT did not change its own offer, but added a bid from Francisco of $225 million to $300 million for the rest of the company’s front-end businesses, including Epitaxy and Vertical Furnaces.

“The wide offer value range, the complex structure of the combined offer and the unclear terms of the partnership furthermore represent significant uncertainty and execution risks for ASMI’s shareholders, employees and other stakeholders,” ASMI said.

What’s interesting is that ASMI’s rejection of the deal has not hurt its stock price, which had rallied when AMAT made the offer; that suggests the Street sees the possibility of a new AMAT proposal.