Siltronic stock price soars as GlobalWafers increase offer to $5.35 billion | Invezz


Silicon wafer manufacturer GlobalWafers increased its bid to buy Siltronic AG (ETR: WAF) to 145 euros ($176) a share, bringing the German company’s valuation to 4.4 billion euros ($5.35 billion).

Fundamental analysis: New improved offer

GlobalWafers said the new offer is final and is a fair value for Siltronic. GlobalWafers first hiked its bid to 140 euros a share on Friday, from 125 euros upon the announcement of the deal a month ago. 

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Siltronic issued a statement in a response to Global Wafers’ price increase, saying the new offer is “attractive”. 

If the deal happens, the combined company would become the largest silicon wafer manufacturer in the world by revenue and gain a market share of 32% to 35%, said Richard Hsia, an analyst at Fubon Securities Investment Services Co.

It would also become the largest deal for GlobalWafers and one of the biggest in the semiconductor industry in over a year as chipmakers are looking to bring their operations back to normal once the coronavirus pandemic is brought under control.

The series of deals made in the chip industry last year is close to breaking the high-water mark, which was last reached five years ago when $122 billion in transactions were struck, including SoftBank’s $32 billion acquisition of Arm.

Technical analysis: Approaching resistance

Siltronic stock price gained over 3.7% last week to print the highest levels since August 2018. The valuation of the company has nearly doubled since November, when the story about GlobalWafers takeover was first reported. 

Siltronic weekly chart (TradingView)

It is likely that the price action will now trade around the offered price of 145 euros per share until the takeover is completed. However, if shareholders reject the latest offer, we may see a sharp turn lower. 

Summary

Silicon wafer maker GlobalWafers Co. hiked its bid to purchase Siltronic AG to 145 euros ($176) a share, taking Siltronic’s valuation to 4.4 billion euros. GlobalWafer said the offer is final, which the German company considered attractive.



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