Mar. 17, 2008 – Axcelis Technologies answer to Sumitomo Heavy Industries’ “final” offer of $6/share was the same as its response to the first one: a unanimous thanks-but-no-thanks rejection by its board, saying the proposed deal “undervalues Axcelis” and is not in the best interests of the company or its shareholders.

In a statement, company chairman Mary Puma noted SHI’s $6/share offer, a sweetened version of its $5.20/share unsolicited takeover proposal that Axcelis similarly rejected a month ago, is an opportunistic move that devalues the company’s “intrinsic value” that it says is “is supported by extensive valuation analyses” and its stock price over the broader one-year range. “Although Axcelis’ recent trading prices, along with others’ in the industry, have been depressed, the board believes the company is well positioned for the future and worth more than $6.00 per share,” she stated.

Stephen Hardis, lead director of Axcelis’ board, added that the company acknowledges delays in its Optima HD high-dose ion implanter have “adversely affected” its financial performance; nevertheless the company is confident in customers’ “favorable reaction” to the new line (first sales from the Optima HD line are to be recognized in 1Q08), and in general about the company’s overall “robust product pipeline.”

While dismissing what SHI had said was its final offer, Axcelis noted in a statement that it does in fact see “significant” and “meaningful” commercial, operational, and financial synergies that would be achieved through a combination with SEN, its 50% JV with SHI, either through operational agreements or an equity transfer — but not at the price that SHI is offering. “It has been clear for a number of years that substantial cost savings and significant synergies could be realized in such a transaction,” the company stated, but added that “Axcelis shareholders should participate in the value of those synergies.”

The company also noted it is not opposed to continuing discussions with SHI, and has had seven sitdowns among top management from both sides since first feelers were put out in July 2006 — including a proposal by Axcelis in Nov. 2006 to share more data under nondisclosure, an offer that went unaddressed. Meetings continued through Mar.-Nov. 2007 but then SHI declined any further talks, according to the company.

And Axcelis says it is open to further private talks (perhaps as opposed to the unusually public airing of the current proposals), to try to find any “mutually beneficial transaction” that would “d explore all alternatives to the current situation” and resolve the firms’ JV to the satisfaction of both sides.