German company Aixtron denied on Tuesday it was in talks with Applied Materials after rumors of a takeover bid pushed shares of the German semiconductor equipment maker up as much as 16%.
"There are no talks with Applied Materials or anyone else," an Aixtron spokesman told Reuters.
Aixtron shares were up 9.6% at 5.95 euros, off a near three-year high of 6.30 euros earlier on Tuesday.
"There are rumors that Applied Materials wants to buy Aixtron," a trader said.
Applied Materials spokesman David Miller declined comment saying the company never comments on rumors.
Aixtron has a market capitalization of 532 million euros ($714 million), based on a 5.92-euro share price and a share count of 89.8 million, compared with $26.6 billion for Applied Material based on a $19 share price and 1.4 billion shares.
Shares of Applied Materials, the world's top supplier of equipment to make microchips, rose 52 cents or 2.8% to $19.17 on the New York Stock Exchange.
Analysts said it was likely the share move at Applied Materials, whose stock was upgraded to "buy" from "neutral" by Banc of America, was not related to the Aixtron rumors.
But Needham and Co analyst Robert Maire said an Aixtron deal could make sense for Applied Materials, which last year bought Applied Films, a maker of equipment used to make flat panel displays and solar cells.
"Aixtron would also be potentially useful in that they deal with more exotic materials which could potentially be part of the strategy that Applied is on in looking at solar or alternative energy," Maire said.
Maire said Aixtron's ability to work with gallium arsenide could help Applied in the solar cell market.
Gallium arsenide, a compound of gallium and arsenic, improves the efficiency of solar cells.