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12 April 2011
Optical components maker Finisar has increased its stake in Norwegian firm Ignis ASA, and has put in an offer to buy the remaining shares for a cash consideration of NOK 8 (€1.02) per share.  However, it’s not the only company interested in buying the firm.
Ignis ASA operates globally through four subsidiaries; Fi-ra Photonics in Korea (71.8% owned) and the wholly-owned companies Syntune in Sweden, Ignis Photonyx in Denmark, and SmartOptics in Norway.  But it’s the Syntune portion of the company, which makes tunable lasers, that appears to have caught Finisar’s eye.
 
“This acquisition represents an extension of our vertical integration strategy,” said Finisar’s chief executive Eitan Gertel. “Ignis has developed, amongst other of its product technologies, a tunable laser that is integrated with a modulator and a semiconductor optical amplifier, and that Finisar believes has the highest performance currently available in the market.”
 
Finisar took an 11% stake in Ignis last year, and topped that up to 32.6% on 21 and 22 March for an aggregate purchase price of NOK 147m (€18.8m).  It now hopes to buy the shares of Ignis that it does not already own, which are valued at approximately NOK 425m (€54.5m).  The price being offered represents a premium of 58.4% over the closing price per share on 21 March 2011, which was the last trading day prior to the announcement of the intention to make the offer. 
 
Ignis reports that it received an offer from another vendor, but after considering both offers, has recommended that its shareholders should accept the offer from Finisar. If the deal is to proceed, it must be accepted by shareholders controlling at least 66.7% of Ignis’ outstanding shares on a fully diluted basis.
 
On 30 March, rival firm NeoPhotonics, which also has close ties with Ignis, submitted a call for arbitration, claiming that its relationship with Ignis gives it right of first refusal should shares be sold.  NeoPhotonics currently owns 18.66% of the shares of Ignis through a subsidiary, and in September of last year signed a strategic agreement with Ignis for the supply of current and future products.  However, Ignis has rejected the call.
 
By Pauline Rigby