Samsung Goes Hostile in Bid For Memory-Maker SanDisk

By Cliff Edwards

Consumer electronics giant Samsung Electronics is taking off the gloves in its bid to acquire flash-memory maker Milpitas (Calif.)-based SanDisk Corp.

The company revealed it has made an unsolicited offer to buy SanDisk for $26 a share. The cash offer represents a whopping 93% premium over SanDisk’s closing share price on Sept. 4, when a South Korean newspaper reported that the two were talking about a combination. The offer would bring a 53% premium over Tuesday’s closing price of $15.04. SanDisk’s board of directors unanimously rejected the bid as undervalued.

Samsung said in five-page press release Sept. 16 that it has spent four months in meetings in Seoul and San Francisco trying to convince SanDisk executives that a combination

Flash memory is used in all manner of digital devices, from the hit iPod to digital cameras and toys. But a glut of manufacturing and factory capacity has sapped profits for many of the big players over the last year. Analysts have steadily downgraded prospects for the industry; several recently recommended investors sell or hold SanDisk shares.

Since reports of the talks first surfaced, Wall Street analysts and industry watchers have been divided on whether Samsung is really serious about acquiring SanDisk. Read More