Despite Samsung's offer of an 80 percent premium above current trading price, SanDisk has opted to go it alone.
Samsung has been rejected by SanDisk after it offered to buy the company for $26 (£13) per share yesterday.
According to economics website PaidContent.org
, Samsung has been in negotiations with solid-state memory expert SanDisk for four months, but felt it needed to make a hostile takeover bid after talks fell apart.
As part of the bid – which represented a not-inconsiderable 80 percent hike over the last traded stock price – Samsung has written a letter to the CEO of SanDisk, Eli Harari, which promised that the two companies would be able to “establish the platforms and capabilities necessary to position flash [memory] as the preferred vehicle for delivery and storage of a wide variety of content, such as film, in a way that would not be possible for either of our companies alone.
Sadly for Samsung, the sweet-talking and share hike wasn't enough to woo SanDisk. The company responded yesterday with a firm rejection, claiming the deal was “inadequate in multiple respects.
” The main bone of contention between the two appears to be, surprise surprise, the price: although Samsung's offer represents a significant premium to SanDisk's current share price, the company points out that when Samsung first started negotiations the share price was worth $28.75 – and Samsung had claimed willingness to pay “a significant premium
” over this price if a deal could be agreed. With the offer finally arriving at below
the original stock price, you can see where SanDisk might get a little upset.
Whether this rejection will result in a higher offer from Samsung, or whether the company will look elsewhere for its flash technologies, remains to be seen.
Can you imagine good things coming out of a SanDisk-Samsung merger, or is the flash memory maker doing the right thing steering clear? Share your thoughts over in the forums