Shares of laser technology company Coherent Inc. (COHR) - Get Coherent, Inc. Report were rising Tuesday after the company received an upsized bid from Lumentum (LITE) - Get Lumentum Holdings, Inc. Report 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) - Get MKS Instruments, Inc. Report 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%.