Hutchinson Technology Incorporated (NASDAQ:HTCH) investors cheering today’s announcement that the U.S. Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the proposed merger of HTI with and into a wholly owned subsidiary of TDK Corporation. The early termination of the waiting period under the HSR Act satisfies one of the remaining conditions to the closing of the pending merger.
As of August 21, 2016 (the “measurement date”), HTI’s level of cash (subject to certain adjustments) less any outstanding borrowings on its revolving line of credit (the “net cash”), as further defined in the merger agreement with affiliates of TDK, was approximately $47.1 million. Based on HTI’s net cash position as of the measurement date, TDK would acquire all of the outstanding shares of common stock of HTI for total consideration of $4.00 per share.
The merger is currently expected to close no later than October 5, 2016, and remains subject to other customary closing conditions set forth in the merger agreemen
Hutchinson Technology Incorporated shares reacted to the news, jumping nearly 165% in early trading Thursday. HTCH has a 1-year high of $3.89 and a 1-year low of $1.32. The stock’s 50-day moving average is $1.50 and its 200-day moving average is $2.99.
On the ratings front, The Benchmark Company analyst Mark Miller maintained a Hold rating on HTCH, with a price target of $4, in a report issued on July 29. The current price target represents a potential upside of 168.5% from where the stock is currently trading. According to TipRanks.com, Miller has a yearly average return of 3%, a 59% success rate, and is ranked #1347 out of 4175 analysts.
Hutchinson Technology, Inc. operates as a global technology manufacturer committed to creating value by developing solutions to critical customer problems. It is a supplier of suspension assemblies for all sizes and hard disk drives. The company has designed its suspension assemblies with a focus on the increasing performance requirements of new disk drives, principally more complex, increased data density, improved head-to-disk stability during a physical shock event and reduced data access time.