Cymer Shares and Volume Soar on Buyout Offer

Andrew Klips  |

Shares of Cymer, Inc. (CYMI), a provider lithography light sources used by microchip makers, gapped ahead this morning upon news that ASML Holding NV (ASML), the biggest semiconductor equipment maker in Europe, agreed to pay 1.95 billion euros, or US$2.55 billion, in cash and shares for the San Diego, California-based company.

Cymer shareholders will receive 1.1502 ASML common shares and $20 in cash for each share of CYMI that they hold. Shares of ASML closed Tuesday trading at $53.59. The deal puts a value per share at $81.63 based upon that closing price, representing a 71 percent premium to Cymer’s closing price of $47.83 on Tuesday. After hitting an intraday high of $77.29 shares of CYMI have settled back into the area of $75.00 per share 90 minutes into the trading day on 6.8 million in volume. That’s about 22 times CYMI three-month average volume.

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ASML said the deal is intended to satisfy customer demand and expedite development of Extreme Ultraviolet (EUV) semiconductor lithography technology. Being that semiconductors effectively are the “brains” of electronic devices, new technologies are necessary to make products faster, smaller and less expensive. EUV is heralded as part of the new wave of technology, but development has hit roadblocks associated with costs. According to ASML, EUV “is vital to support the semiconductor industry’s transition to the next manufacturing technology, which is needed to create microchips with more functions at a lower cost and that are more energy-efficient, consistent with Moore’s Law.”

“We believe that combining ASML and Cymer will speed up the development of the EUV-technology,” said Chief Financial Officer Peter Wennink in a video on ASML’s website.

Subject to customary conditions and approvals, the deal is expected to close in the first half of 2013.

In a separate matter, Netherlands-based ASML reported earnings this morning that modestly disappointed. The company notched revenues of 1.229 billion euros for the third quarter; flat sequentially with the second quarter. Gross margins were also basically unchanged at 43.2 percent. Profits slid to 65 cents from 71 cents in Q2. ASML, whose clients include Intel Corp. (INTC) and Taiwan Semiconductor Mfg. (TSM), also said that it expects its second half of 2012 revenue to fall on the lower end of previous guidance of 2.2 billion to 2.4 billion euros.

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