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SanDisk rejects Samsung takeover bid

SanDisk rejects Samsung takeover bid

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.

5 Comments

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perplekks45 18th September 2008, 15:11 Quote
1st: 26$ = 13£? Not quite right... :)

http://imageshack.us
http://g.imageshack.us/img399/abctp4.png/1/

2nd and on topic:

Nice SanDisk! Don't give in! I like their SD cards and I love their MP3 players... I don't want Samsung to take over.
mrb_no1 18th September 2008, 16:38 Quote
from my brief knowledge of fighting a hostile takeover bid, samsung should have seen this defence from sandisk coming, offering below an existing share price from no more than 6 months ago, you wouldnt even need to ask major shareholders for their opine on the matter, the offer alone is samsung giving the finger to sandisk as to say we really dont think you are worth that much. A hostile bid needs to offer their shareholders something, offering below a price is not the way to go, maybe if they offer $40-45 per share then sandisk shareholders might just have to say hell yeh, epsecially those major shareholders who stand to make loads of money.

I dont see it as a bad thing either, samsung has money invested in technologies elsewhere so their coming together might not be a bad thing, but maybe we'll just never know.

peace

fatman
Firehed 18th September 2008, 20:21 Quote
Good. I bought a couple of Samsung drives a couple of months ago. One just came back from RMA a few hours ago, and the other has seen a couple of issues too (thankfully fixed by a reboot so it may have been a fluke, but it still scared the hell out of me). It's the first and last time I buy their drives. And now I'm going to end up needing a Drobo or something because I'd need a T3 or so before using the online backup services could be effective enough for all of my media - I simply don't have nearly enough upload capacity to deal with the constant file changes.

Samsung's TV sets and such tend to be fine, but I've never had a problem with Sandisk media and I'd like it to stay that way.

And tbh, the last thing we need is an EVEN bigger company to implode with what's been going on the last few days. But I've always vastly preferred small businesses.
cebla 19th September 2008, 01:59 Quote
I personally have 8 Samsung HDDs and have recommended them to a number of other people. So far none of us have had any problems. Maybe you were just unlucky or the drives had been ill treated before you got them.

That being said I have had a few problems with Samsung's DVD drives. The most common thing I have observed is a problem where it doesn't keep the tray out for more than a few seconds. So you have to be very quick taking the disk out or putting a new one in.
docodine 19th September 2008, 05:52 Quote
All I own by Samsung is an excellent cellphone, and I can't remember any SanDisk purchases. Their MP3 players look pretty cool though, nicely low priced.
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