BackSanDisk rejects Samsung’s $6 bn offer, may consider a better deal
SanDisk rejects Samsung’s $6 bn offer, may consider a better deal
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Seoul/San Francisco: US’ flash memory card maker SanDisk Corp. rejected a $5.9 billion (Rs27,317 crore) bid by top memory chip maker, Samsung Electronics Co. Ltd, but would not rule out a deal at a better price.
Flash memory is a form of compact data storage, used in consumer gadgets such as digital cameras, cellphones and portable music players.
Buying SanDisk would give Samsung advanced technology and a tighter grip on its market dominance as smaller rival Toshiba Corp. is challenging its position and the industry battles memory price falls because of capacity overbuilding.
Samsung, which pays SanDisk over $350 million a year in royalties to use patented flash technology, is looking not only to slash those costs but also gain control of SanDisk’s many licences that control the industry.
“With the offer, Samsung is eyeing an industry shakeup in the 4-5 year horizon. Samsung and SanDisk can work on technology and marketing together," said Park Hyun, an analyst at Prudential Investment and Securities Co. Ltd.
SanDisk said in a statement that Samsung’s $26-a-share cash offer—an 80% premium to its Monday close—undervalued the company, but it remained open to a deal with Samsung at a price that recognizes its “intrinsic value".
SanDisk shares soared 53% to $23 in extended trading on Tuesday in the US after Samsung went public with its bid following months of private talks that failed to produce a deal. Samsung, South Korea’s biggest stock, ended flat at 525,000 won on Wednesday, lagging the wider Seoul market’s 2.7% gain.
When asked if Samsung could raise its bid, James Chung, a company spokesman in Seoul, said: “It is premature to comment on the matter." He called the bid “full and fair".
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