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Lumentum Increases Bid to Acquire Coherent Inc.

Lumentum raised its bid to acquire Coherent to about $287.50 per share with a Wednesday deadline for acceptance.
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Shares of laser technology company Coherent Inc.  (COHR)  were rising Tuesday after the company received an upsized bid from Lumentum  (LITE)  to acquire the company. 

Lumentum would pay $230 per share in cash and 0.6724 shares of stock for each Coherent share they own. Based on the company's closing price Monday, the bid equates to $287.50 per share. 

Lumentum is financing the cash portion of the transaction through a combination of cash on hand, $3.25 billion in new debt financing, and a previously announced $1 billion equity investment from Silver Lake. 

The revised bid will remain on the table until 11:59 p.m. Pacific Time on Wednesday. 

Lumentum's bid comes after rival II-VI  (iiVI)  lifted its offer to Coherent to $220 cash plus 0.91 a share for each Coherent share.

The board of Coherent, Santa Clara, Calif., informed II-VI that the new proposal was superior to a revised proposal it received from Lumentum last Wednesday. 

That bid came on top of a raised Lumentum bid of $220 per share in cash and 0.61 shares per Coherent share. The total value of that deal was estimated to be $6.9 billion. That bid was up from its previous offer that valued the company at $6.6 billion.

Two weeks ago, MKS Instruments  (MKSI)  abandoned its bid to buy Coherent after Coherent chose the II-VI proposal, the Pennsylvania-based maker of engineered materials. 

Under terms of the companies' previous merger agreement, Coherent would be required to pay Lumentum a $217.6 million termination fee if it chooses a rival bid. 

Coherent shares were climbing 1% premarket while Lumentum shares were down 1.5%.