Hold Verigy for a higher bid

Article Excerpt

VERIGY LTD. $13.49 (Nasdaq symbol VRGY; SI Rating: Extra Risk) (1-800-447-8378; www.verigy.com; Shs. outstanding: 60 million; Market cap: $807.7 million; No dividends paid) is now the subject of a $12.15-a-share takeover offer from Japan-based Advantest Corp. Advantest is the world’s largest maker of systems that test computer memory chips. Advantest is taking advantage of the high value of the yen against the U.S. dollar to make the offer. Verigy is not satisfied with the $735-million offer, but aims to open discussions with Advantest to negotiate a higher price. The offer is below Verigy’s 2010 high of $13.75, which it reached in January. Separately, Verigy still plans to proceed with its all-stock purchase of LTX-Credence Corp. (Nasdaq symbol LTXC), which should close in the first half of 2011. LTX is a rival maker of computer-chip testing equipment. Verigy’s shares are now trading at 11% above Advantest’s offer, which indicates that investors expect a higher price. Verigy is now a hold. hold…

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