Veeco Instruments (VECO) Expected to Trade Higher on Takeover Bid for Rival - Needham & Company

Needham & Company analyst Y. Edwin Mok expects Veeco Instruments Inc. (NASDAQ: VECO) after China-based Fujian Grand Chip Investment Fund LP offered to acquire competitor Aixtron (NYSE: AIXG) for €690m.

"Based on consensus forward estimates, the deal price values AIXG at 3.2X VECO's current Enterprise Value, highlighting underlining value of the IPs.," Mok commented. "We expect some challenges at various authorities, and efforts in closing this deal could be distractions to AIXG's management, benefiting VECO in the near-term. However, we see some longer-term risks on VECO's market share in China, as this competitor positions in the largest MOCVD market could improve. In addition, we believe the condition of LED industry remains weak and unclear when growth will return. We do not believe any Chinese buyer will bid for VECO, and therefore, we remain on the sidelines on VECO despite any takeover speculation."

The firm has a Hold rating on VECO.

For an analyst ratings summary and ratings history on Veeco Instruments Inc. click here. For more ratings news on Veeco Instruments Inc. click here.

Shares of Veeco Instruments Inc. closed at $16.94 yesterday.

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