Varian Semiconductor Sued by Investor Over $4.9 Billion Bid

July 14, 2011, 11:30 AM EDT By Janelle Lawrence and Phil Milford

(Updates with excerpt from complaint in third paragraph.)

July 14 (Bloomberg) -- Varian Semiconductor Equipment Associates Inc. was sued in federal court by an investor who says stockholders will be shortchanged in a planned $4.9 billion, $63-a-share takeover by Applied Materials Inc.

Investor David Crane also contends Varian directors violated U.S. securities law by issuing misleading proxy materials that failed to fully explain the sales process and why the board “chose to negotiate exclusively with Applied,” according to a complaint filed yesterday in Boston.

Shareholders “will be prevented from obtaining a fair price for their common stock” unless a judge and jury stop the transaction under its present terms, Crane said in court papers.

Applied, based in Santa Clara, California, agreed May 4 to buy Gloucester, Massachusetts-based Varian Semiconductor in anticipation of increased demand for microchip technology used in mobile devices such as Apple Inc.’s iPhone.

Bob Halliday, Varian’s chief financial officer, didn’t immediately return a call seeking comment on the lawsuit.

Varian Semiconductor rose 8 cents to $61.41 at 10:50 a.m. New York time in Nasdaq stock market trading. The stock has risen 66 percent this year.

The case is Crane v. Varian Semiconductor, 11CV11236 RGS, U.S. District Court, District of Massachusetts (Boston).

--Editors: Glenn Holdcraft, Charles Carter

To contact the reporters on this story: Janelle Lawrence in Boston at jmlawren@aol.com; Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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