The world's largest supplier of flash storage card products SanDisk, has rejected a hostile takeover bid from South Korean major Samsung Electronics proposing to purchase the US major's shares for $26 each in cash.
The board of directors confirmed that the company had received an unsolicited and non-binding proposal from Samsung Electronics to acquire at $26 per share in cash, SanDisk said in a statement.
Further, after multiple meetings with Samsung since its original indication of interest in an acquisition, SanDisk's board of directors deliberated on Samsung's proposal with advice from its financial and legal advisors.
On September 15, the board sent a letter to Samsung reflecting the board's unanimous conclusion that the proposal was inadequate in multiple respects and not in the best interests of SanDisk's stockholders.
The letter stated the proposal significantly undervalued SanDisk given the long-term prospects of its business and did not reflect the value of the substantial synergies that Samsung could attain from an acquisition of SanDisk.
"We believe Samsung's proposal does not provide appropriate value to our stockholders and is opportunistically timed at the trough of an industry-wide downturn, " SanDisk chairman of the board and chief executive officer Eli Harari said.
"In our view, this proposal fails to recognise the value of our patent portfolio, in particular to Samsung, our significant investments in our strategic partnerships, and our technology leadership in three and four bits per cell flash memory," Harari added.
Besides, Samsung has responded to SanDisk by reiterating its offer. Samsung Electronics said in a statement that the company remained prepare to acquire all the outstanding shares of SanDisk for $26 per share in cash, the entire purchase price would be funded with the cash in hand and available financing.
The proposal constituted a very substantial premium to SanDisk share price and would deliver to the shareholders an immediate cash premium of 93 per cent over the closing share price on September 4, the day before news reports indicated that the company were in discussions about a business combination, the Samsung statement said.
