Yet another potential consolidation deal in the tech sector has fallen apart. Asyst Technologies Inc. [ASYT], which makes equipment that automates semiconductor and flat-panel display manufacturing, said Friday that merger talks with rival Aquest Systems Corp. have ended.

Aquest and private equity firm Gore Group LLC unveiled a $326 million, $6.50 per share bid for Asyst in July.

Apparently, Aquest was unable to pull together a proposal to buy Asyst's stock. Asyst chairman and CEO Stephen Schwartz said in a letter to Aquest CEO Mihir Parikh (who founded Asyst in 1984 but left nine years later) and Gores Group senior managing director Scott Honour that the prospective buyers had trouble structuring a deal and securing financing.

Schwartz did leave the door open for further discussions, however.

"Please be assured that our Board of Directors is open at any time to give due consideration to any credible transaction proposal that would enhance shareholder value and that meets the standard criteria we have discussed," he wrote.

Gores and Aquest in February offered to buy Asyst for between $248.5 million and $298 million, or up to $427 million including debt. But back then, Asyst rejected the $5 to $6 per share offer, calling it "inadequate" and saying it "significantly undervalued the company." It also accused the buyers of attempting to capitalize on a low point in the semiconductor equipment cycle.

With its shares trading at $1.08 early Friday afternoon, Asyst could very well be wishing it were February again.

It's unclear what the news means to Riley Investment Management LLC, which had been threatening a proxy fight for control of the company's board of directors. The firm pulled its slate in September, saying a proxy fight would disrupt deal talks between the companies. A Riley representative reached Friday declined to discuss the firm's plans now that the potential deal has fallen apart. - Olaf de Senerpont Domis

See Oct. 10 press release on end of Asyst-Aquest talks via Yahoo! Finance
See July 31 post on Aquest's bid from Tech Confidential