What's Wrong With Photon Dynamics? (Updated)

Something funny is going on today with Photon Dynamics (PHTN).

The company, which is an equipment supplier to the flat-panel display business, has an agreement in place to be acquired by Orbotech (ORBK) for $15.60 a share in cash. In fact, on Friday the company announced that its holders had approved the deal. So riddle me this: Why is the stock trading like something about the deal has gone very wrong? PHTN is down $2.34, or 15.5 percent, to $12.74. Orbotech, meanwhile, is up 5 cents, at $10.52.

I’ve left a message for the company, and will left you know if/when I hear from them.

Update: So, now I’m wondering if the completion of the deal has been affected by the issues at Lehman, which has been Orbotech’s financial adviser on the transaction. The deal, which was for about $290 million, was to be financed by a combination of internal and external funds.

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