"We believe that Camtek Ltd. (Nasdaq: CAMT; TASE:CAMT) must formulate a management strategy to create value ahead of a future sale," says Oppenheimer & Co. Inc.
The advice comes after KLA-Tencor Inc. (Nasdaq: KLAC) made an offer to buy Belgium's Icos Vision Systems SA (Euronext: IVIS) for €317 million ($466 million) in cash, a 60% premium on the company's market cap. Oppenheimer notes, "The consolidation underway in the equipment industry leaves no room for the existence of small independent companies."
Icos and Camtek have similar market shares in the automated optical inspection (AOI) equipment industry. However, in contrast to the offer price for its rival, Camtek's share has been halved in the past four months and by two-thirds in the past year to $1.42 on Nasdaq, giving a market cap of $43 million, including $14 million in cash. Oppenheimer says that Camtek is traded at an "especially low price".
Oppenheimer reiterates its "Perform" recommendation for Camtek on the grounds that the Icos offer "opens a window of opportunity to increase market share, although there is long-term risk', but "the absence of a clear strategy for creating value by the company" has resulted in low value for the company.
Oppenheimer also notes that Icos is Camtek's second competitor to be acquired, after Rudolf Tech Inc. (Nasdaq: RTEC) bought August Technology Corporation, two years ago.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2008
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