Weak markets forces Samsung to drop hostile bid for SanDisk

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Samsung, the world’s largest memory chip maker, has withdrew a $5.9 billion, or a $26/share, unsolicited bid to buy SanDisk; citing that SanDisk’s losses may worsen during time and failing to make any “meaning progress” over six month after SanDisk rejected its first bid.

This comes also a “hurried”, as Samsung’’s vice chairman and CEO Yoon Woo Lee put it in his letter, agreement with Toshiba over manufacturing.

“Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung,” Lee writes.

“As a result of these developments, we are no longer interested in acquiring SanDisk at $26/share.”

SanDisk has responded to the dropped bid, saying that its “Board has remained open to a transaction that recognizes SanDisk’s long-term value and contains the right protections for SanDisk’s shareholders.”

“We repeatedly outlined a clear path to hold further discussions, including most recently in our letter on September 15, and Samsung consistently chose to ignore that path and, in fact, never contacted SanDisk regarding their proposal after we delivered our letter.”

“We believe this raises questions about the real motivations behind Samsung’s offer.”