SunEdison Semiconductor Ltd. Stock Soars 40% -- Here's Why

By Markets Fool.com

What: In a transaction valued at $638 million, GlobalWafers announced Wednesday evening it entered into a definitive agreement to acquire SunEdision Semiconductor (NASDAQ: SEMI). Following the announcement, SunEdison stock soared as much as 40.1% on Thursday. The stock is up 38.8% at the time of this writing.

Continue Reading Below

Image source: SunEdison Semiconductor.

So what: It makes sense shares are trading higher on Thursday. GlobalWafers is paying $12 per share in cash -- a 45% premium to where SunEdison stock closed on Wednesday. After SunEdison stock's rise on Thursday, the stock is trading at about $11.50 per share -- $0.50 shy of the agreed upon per-share acquisition price.

The transaction has been unanimously approved by both companies' boards of directors.

"We are pleased to have reached an agreement that delivers a significant premium to our shareholders," said SunEdison CEO Shaker Sadasivam in a press release on Wednesday."We believe this transaction is in the best interest of our company. We look forward to a smooth process to facilitate an efficient closing, which we hope can occur before the end of the year."

Now what: Investors should keep in mind that the deal isn't certain until it closes. The two companies specifically note in their press release that the deal is "subject to the approval of the shareholders of SunEdison Semiconductor, as well as other customary conditions including approvals from relevant regulatory authorities and the High Court of the Republic of Singapore."

Continue Reading Below

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.