Three weeks after Saxonburg-based optical instruments maker II-VI had its unsolicited $169.4 million takeover bid for Zygo Corp. rejected by the Connecticut company's board, II-VI officers announced Tuesday that it would cease its acquisition efforts and withdraw its proposal to acquire Zygo for $10 per share.

II-VI submitted an offer to Zygo's board of directors on Jan. 5 to acquire all of its outstanding common shares. At the time, the offer represented a premium of 46 percent to the 30-day trading average of Zygo shares.

Zygo's shares closed at $8.49 Tuesday, down from Monday's $10.06, but still higher than they had been before II-VI's offer was announced. Then, news of the proposal sent Zygo's stock above $8 a share for the first time since October 2008. Shares of II-VI closed Tuesday at $32.26, up from $30.81.

In rejecting the proposal, Zygo's board said the optics company was not for sale and that it was in the best interests of its shareholders to allow Zygo's newly named CEO, Dr. Chris L. Koliopoulos, to pursue a stand-alone strategy.

II-VI's president and CEO Francis J. Kramer said in a statement Tuesday that "II-VI's desire was to proceed in a friendly manner. Given the reluctance of Zygo's board of directors to share with us the prospect of their strategic plan for creating shareholder value and their unwillingness to even enter into discussions with us regarding our proposal, we have decided to withdraw our offer for Zygo and instead focus on our existing business and other strategic opportunities available to II-VI."

The acquisition of Zygo would have been the latest in a string of purchases by II-VI, which closed in January on its buy of Photop Technologies Inc., a Chinese manufacturer of lasers and optical components for $45.6 million and approximately 1.15 million shares of II-VI common stock.

II-VI chief financial officer Craig Creaturo said II-VI, which ended the last quarter with more than $116 million in cash and cash equivalents, would continue shopping.

"We are looking for acquisitions, and we have a history of doing acquisitions from time to time. That has been part of our growth strategy in the past," he said.

"Money Q&A" and "Company Town" are featured exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.