Sandisk tight lipped but Samsung sings
Tiny URL: http://tinyurl.com/67jr7f
Sandisk issued a statement yesterday about rumors that Samsung may be acquiding the flash memory maker. It’s business as usual it seems
“SanDisk periodically has conversations with multiple parties, including Samsung, regarding a variety of potential business opportunities. We evaluate all of these opportunities, but maintain a policy of not commenting on market rumors or speculation.”
However, Samsung, in a press release today announced that it has sent a letter to Sandisk’s board of directors, reiterating it’s intent to buy the flash maker for $26 per share which will be funded in cash. This is a 93% premium to Sandisk’s stock price on the 4th of September 2008 when rumors first leaked about the deal. It is also a 80% premium to Sandisk stock on close of business on September the 15th.
We are in receipt of your letter dated September 15, 2008 and are deeply disappointed that after four months of discussions and meetings – in Seoul and San Francisco – about a possible business combination, SanDisk Corporation (“SanDisk”) continues to cling to unrealistic expectations on both its standalone market value and an appropriate merger price.
The press release includes the letter sent to Sandisk’s CEO, Eli Harari, which reveals that the discussion has been going on for 4 months and it seems Sandisk is unhappy with the $26 a share offer. Sandisk is using it’s 52 week high stock price ($55) to arrive at a sale price that it thinks is fair for the company.
Samsung pays around $500 mil a year in license fees to Sandisk, and Sandisk’s shares have been at 52 week lows, giving it a market cap or roughly 2 billion dollars. It makes a lot of sense for Samsung to acquire the entire company.
SanDisk’s product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders, digital audio/video players, USB flash drives for consumers and the enterprise, embedded memory for mobile devices, and solid state drives for computers.
