Posted on 09/16/2008 6:30:15 PM PDT by libh8er
SanDisk has rejected an unsolicited takeover bid from hardware maker Samsung Electronics, saying that it undervalues the Milpitas, California, maker of flash storage cards.
The two companies had been in takeover talks for about four months, but Samsung went public with its offer Tuesday, apparently after discussions had broken down.
"Our offer insulates your shareholders from the risk of market conditions that have severely deteriorated and are expected to remain challenging," Samsung Vice Chairman and CEO Yoon-Woo Lee wrote in a letter to SanDisk executives that Samsung released Tuesday.
SanDisk Chairman and CEO Eli Harari responded quickly, saying in a statement his company is willing to discuss a takeover, but that the US$26 per share offer "is opportunistically timed at the trough of an industry-wide downturn" and undervalues the flash card maker.
SanDisk's stock (SNDK), which had been trading in the $30 dollar range just four months ago, has dropped in recent months as a result of a global glut of flash memory chips. The stock closed Monday at $15.03, but was up more than 50 percent in after-hours trading after news of Samsung's offer broke.
SanDisk also suggested that the offer may be a "calculated negotiating ploy" aimed at gaining the upper hand in an ongoing patent-licensing dispute between the two companies.
The company's board of directors sent a letter to Samsung Monday stating that it had unanimously rejected the deal.
Samsung argues that a combination of the companies would create a powerful global brand and allow the resulting company to position Flash as the preferred technology for delivery and storage of content.
While Samsung said that SanDisk is a technology leader and has an innovative culture, it also argued that independently investing in the necessary facilities required to further technology innovation would be a significant tax on SanDisk's business.
Should the deal go through, Samsung would continue to operate SanDisk as a separate subsidiary and would not plan to lay off workers, it said.
Samsung could only drag SanDisk down.
Samsung has cash and resources that SanDisk doesn’t.
From a personal usage standpoint, SanDisk has had a history of quality products whereas Samsung has not. Samsung has gotten better the last few years, but they can also cheapen a product at cost to quality and not bat an eye. I’d prefer to see them stay separate, but if they do merge, I hope they allow SanDisk to operate independently as far as product design, manufacture and quality control.
Sandisk had the best card reader for years and quality memory...but the public is fickle...and they are fuxxored.
If they don’t have the financials...they’re eaten.
Hate to be the guy who bought in late.
From the Sandisk balance sheet:
Total Cash (mrq): 1.31B
Total Cash Per Share (mrq): 5.818
Total Debt (mrq): 1.23B
Total Debt/Equity (mrq): 0.247
Current Ratio (mrq): 3.881
Book Value Per Share (mrq): 22.056
Notice the cash available and book value. Debt is long term.
I was in San Francisco a few months back and was about to take pictures of the Golden Gate when I started getting card read errors . Tried formatting several times but to no avail. Card wouldn’t format. Luckily I had another 4 GB card back at the hotel so I was bale to come back the next day and take pictures, but my faith in SanDisk was seriously shaken.
ping
Look, as a general rule, when a large so-so company buys a small good company, the good company ends up a so-so division.
SNDK will be a fun stock to daytrade tomorrow. Up 50% after hours.
Yup. I've not had any problems at all with Sandisk cards.
I've had a few of their mp3 players as well, and they've worked pretty well.
Player is made in china though.
Recent conversations with Sandisk personnel have been really testy.
I’d attributed it to the small margins on hardware, but this background situation might have a lot to do with it.
Sandisk makes pretty good MP3 players.
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