Please ensure Javascript is enabled for purposes of website accessibility

Coherent Stock Surges Following New Buyout Offer From MKS Instruments

By Keith Noonan - Feb 8, 2021 at 6:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The laser technology specialist has two potential buyers, and its share price hasn't been this high in almost three years.

Shares of Coherent (COHR 0.13%) surged on Monday following the announcement that it had received an unsolicited acquisition bid from MKS Instruments (MKSI -2.41%). The industrial laser technology company confirmed in a press release that it had received an offer that would see each share of its stock exchanged for $115 in cash and nearly three-quarters of a share of MKS stock.

The market clearly likes the offer, and it could beat a previous buyout bid from Lumentum Holdings (LITE -2.27%). Coherent's board of directors didn't commit to withdrawing its recommendation of the proposed Lumentum deal, but interest in the new offer is clear, and the stock jumped double digits on the news. 

A person touching a network of dollar-sign icons.

Image source: Getty Images.

Coherent previously announced on Jan. 19 that it had entered into a merger agreement with Lumentum, which would see each share of Coherent common stock exchanged for $100 in cash and 1.1851 shares of Lumentum stock. But the merger had yet to be finalized, and the laser specialist still has the flexibility to go with the MKS offer.

Management says no decision has been reached on which suitor it will go with, and the company is receiving financial consulting from Bank of America and legal counsel from a team of experts.

The market seems to like the competition at the very least, and Lumentum may have to raise its offer if it wants to close the deal. Coherent said it will be evaluating the proposed buyouts with consideration to the near-term and long-term opportunities, the time needed to complete the deals, and the respective closing risks of each transaction. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Coherent, Inc. Stock Quote
Coherent, Inc.
COHR
$268.22 (0.13%) $0.36
MKS Instruments, Inc. Stock Quote
MKS Instruments, Inc.
MKSI
$104.53 (-2.41%) $-2.58
Lumentum Holdings Inc. Stock Quote
Lumentum Holdings Inc.
LITE
$80.41 (-2.27%) $-1.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.