Rudolph Tech Breathes Easier
The merger agreement between Rudolph Technologies (RTEC) and August Technology (AUGT) remains under water, but Rudolph CEO Paul McLaughlin wants investors to know the deal has climbed closer to the surface.
August and Rudolph agreed in June to merge in a cash and stock deal worth $10.50 an August share at the time. That followed an $11 million payoff by August to Nanometrics (NANO) to scuttle their existing merger deal.
Rudolph shares, which traded at $13.77 when the merger with August was announced, have become more valuable since then, climbing back above $15 on Thursday. "This is not the original $10.50 offer," said McLaughlin. "It depends on where [our] stock is."
For McLaughlin, this represents the increasing value that August shareholders will get if a merger with Rudolph is completed. Based on the deal's exchange ratios, August shares are now worth between $11.14 and $11.25 each. However, they're still below where the shares actually trade, even considering a seven-week pullback to $12.08.August has been at the center of a bidding war all year as Nanometrics, then Rudolph, and then KLA-Tencor (KLAC) have all sought to buy the chip equipment company. August shares have continued to trade above the Rudolph offer as investors have anticipated more bidding. The main impetus is KLA-Tencor, the world's seventh-largest chip equipment company, which has said it will pay $11.50 a share in cash for August. KLA-Tencor has been quiet of late, but executives have repeatedly said their interest is serious. But Rudolph and August executives say KLA-Tencor has yet to make an official offer for August. Rudolph and August maintain that their agreement represents excellent long-term value, regardless of where August's stock currently trades. "From a shareholder perspective, there are a lot of definite things to look forward to," McLaughlin said, citing what would be the combined company's increased scale and competitive position and the general outperformance of small-cap semiconductor equipment stocks vs. large-caps.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV