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Verigy Rises as Advantest Raises Offer to $15 a Share

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Dec. 23 (Bloomberg) -- Verigy Ltd. rose in Nasdaq trading after the maker of testing equipment for semiconductor manufacturers said it received a sweetened takeover offer from Advantest Corp. for $15 a share, valued at about $900 million.

Advantest’s cash bid is 23 percent more than its Dec. 6 offer of $12.15, Singapore-based Verigy said today in a statement. Verigy climbed 40 cents, or 3.2 percent, to $13.03 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have gained 1.3 percent this year.

The new proposal raises the stakes in a bidding war between Advantest and LTX-Credence Corp. for Verigy, a maker of testing gear for chips including those that handle so-called flash memory, which store songs and photos in products such as Apple Inc.’s iPhone. The acquisition would help Tokyo-based Advantest, which has lost money in each of the past two fiscal years, reduce its reliance on the computer memory equipment, where manufacturers have cut back on investment in machinery.

Verigy announced in November it would merge with LTX-Credence, based in Milpitas, California. Verigy said today that its board continues to recommend the LTX-Credence transaction to shareholders. The board isn’t making any recommendation about the revised proposal by Advantest and anticipates more discussions with that company, Verigy said. Advantest will not comment on its latest offer while discussions are in progress, according to spokeswoman Amy Gold.

64% Premium

Verigy had 60.5 million outstanding shares as of Dec. 8, according to Bloomberg data. On that basis, Advantest’s new bid would value the company at $907.8 million, the largest of any announced deal for a Japanese or American semiconductor-equipment company in the past five years.

Advantest’s new offer is a 64 percent premium to Verigy’s closing price on Dec. 3, the last trading day before Advantest’s earlier offer. The bid price is 17.3 times earnings before interest, taxes, depreciation and amortization, less than the median Ebitda multiple of 20 among eight industry deals in the U.S. and developed Asian nations since 2005.

LTX-Credence shares fell 5 cents to $7.73 on the Nasdaq. Advantest dropped 0.2 percent to 1,886 yen in Tokyo trading.

To contact the reporters on this story: Peter Elstrom in New York at pelstrom@bloomberg.net and Alex Sherman in New York at asherman6@bloomberg.net.

To contact the editor responsible for this story: Peter Elstrom in New York at pelstrom@bloomberg.net.

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