TPG goes hostile with Sumitomo on semiconductor bid

Sumitomo Heavy Industries and TPG have gone public with their $544 million offer to purchase Axcelis following 18 months of failed attempts to negotiate a buyout of the semiconductor company.

The board of directors for Nasdaq-listed Axcelis Technologies, a semiconductor company, has curtly acknowledged a $544 million (€374 million) take-private offer from Japanese company Sumitomo Heavy Industries (SHI) and private equity firm TPG.

Though SHI notes the $5.20 per share offer represents a 28 percent premium over Axcelis’ 8 February closing share price, Axcelis counters that the offer is nearly 10 percent less than the stock’s average closing price in the past 52 weeks.

The buyout offer, in which TPG is “a minority partner and financing source”, according to SHI, was initially made on 4 February via an unsolicited letter. But SHI says the company’s board “declined to engage in meaningful discussions”, while Axcelis says it told the potential buyers it would discuss the proposal with advisors and react accordingly.

“Instead, the Japanese company chose to not wait for Axcelis to respond and made public its letter”, Axcelis said.

Meanwhile, the potential buyers say they have effectively been waiting for Axcelis to engage in discussions with them for the past 18 months.

“Axcelis’ board has continually rebuffed our interest saying the timing was not right for them, and we have been extremely patient. However, during this time Axcelis’ market share and financial performance have declined dramatically,” SHI said. “We believe that time is of the essence for Axcelis, and that the company’s stockholders, customers and employees deserve to be made aware of our compelling proposal.”

Axcelis said it is considering the offer, but also noted that SHI and Axcelis already fail to see eye-to-eye on their SEN Corporation joint venture. The two companies each own 50 percent of SEN, a Japanese company that licenses technology from Axcelis.

“Although the SEN joint venture has been very successful in its 25-year history, recently SHI has made clear that it has ambitions for SEN that are not in the best long-term interests of Axcelis and its shareholders,” SHI said. “In fact, SHI has supported SEN's position on a number of matters which are being resolved in a pending arbitration in Japan.”

TPG declined comment.