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KLA-Tencor Withdraws August Tech Offer

The move clears the path for a merger with Rudolph Tech.

August Technology


didn't want to be acquired by


(KLAC) - Get KLA Corporation Report


It took nearly a year, but KLA-Tencor has finally gotten the message.

Chip-equipment maker KLA-Tencor on Monday withdrew its offer for its smaller rival. KLA-Tencor had offered to purchase August last February for $11.50 a share in cash.

In a statement, KLA-Tencor expressed "disappointment that the two companies were unable to enter into substantive discussions and reach a final agreement."

August has been a popular attraction on the chip equipment merger-and-acquisition circuit for the last year. Last January, the company announced a deal to be acquired by


TheStreet Recommends

(NANO) - Get Nanometrics Incorporated Report

. That offer was

quickly followed by KLA-Tencor's -- and one from

Rudoph Technologies

(RTEC) - Get Rudolph Technologies, Inc. Report

. The company

canceled its engagement with Nanometrics in favor of Rudolph.

Still, until Monday, KLA-Tencor insisted that it was the fittest suitor. Not only was its bid higher than Rudolph's, but it

purchased a significant chunk of August's stock to show its interest.

The way is now clear for August's marriage of choice to Rudolph, but investors in both companies didn't seem particularly pleased by the development. In after-hours trading on Monday, shares of both companies fell following KLA-Tencor's announcement. In recent exchanges, August's stock was off $1.08, or 9%, to $11, while Rudolph's was down 62 cents, or 4%, to $14.85. Meanwhile, shares of KLA were off 6 cents, or less than 1%, in after-hours trading to $51.71.

At the close of regular trading on Monday, shares of August were off 10 cents, or 1%, to $12.08; Rudolph shares were up 42 cents, or 3%, to $15.47; and KLA-Tencor shares were up 15 cents, or less than 1%, to $51.77.