Electronic-components maker II-VI Inc. plans to make a roughly $6.5 billion bid for Coherent Inc., according to people familiar with the matter, setting up a seldom-seen, three-way takeover battle for the laser maker.
II-VI plans to offer $260 a share for Coherent as soon as Friday, with $130 in cash and the rest in II-VI shares, the people said. Coherent already agreed to sell itself to San Jose, Calif.-based Lumentum Holdings Inc. for about $226 a share before MKS Instruments Inc. last week made a roughly $240-a-share offer of its own.
Santa Clara, Calif.-based Coherent makes lasers and related products used in medical and scientific equipment, industrial applications and semiconductor manufacturing. Lumentum, MKS and II-VI make similar products.
II-VI, with a market value of about $10.4 billion, is the largest of the three suitors. It is based in Saxonburg, Pa., and makes photonic and electronic materials and components. “Two-Six,” as it is known, refers to groups of elements on the periodic table central to optoelectronics.
II-VI and Coherent have an existing tie: In December, Coherent entered into a supply agreement with II-VI for automotive and electrification welding. II-VI sees the potential for $200 million in cost savings within three years following close of a deal for Coherent, the people familiar with the matter said. II-VI purchased Finisar Corp. for $3.2 billion two years ago and said in an earnings report earlier this week that it expects to hit cost-savings targets stemming from that combination a year early.
