On Friday, flash media maker Lexar Media (LEXR) obtained a higher revised takeover bid from Micron Technology (MU). The revised bid areas the all-inventory Trade provide at close to $ten a share, up marginally with the First bid.
But main shareholders which include billionaire investor Carl Icahn coupled with hedge money and portfolio professionals have considered the First bid for being inappropriate. Elliott Associates thinks the initial bid “significantly undervalues Lexar,” and feels Lexar is well worth amongst $1.five billion and $2.4 billion. The estimate is nicely higher than the revised takeover bid of about $827 million.
I need to concur and say the revised takeover bid is way much too small and has to be rejected by shareholders. Micron desires to shell out all-around one.10x profits for Lexar even though the marketplace chief SanDisk (SNDK) is buying and selling at 4.35x gross sales. Lexar also has a $four hundred million patent infringement lawsuit in opposition to Toshiba that it had Beforehand gained but has become topic click here to an appeal by Toshiba.
Think about it using this method, A prosperous $400 million settlement in favor of Lexar would equate to all-around $4.83 for each share in supplemental dollars to incorporate to The existing $0.fifty four in free of charge cash immediately after personal debt that Lexar has. This suggests Micron would fork out under $five a share for Lexars property, which happens to be minimal.
There is certainly also speculation that SanDisk is significantly thinking of having a operate at attaining Lexar. This could make sense due to the fact SanDisk would solidify its leadership place.
Additionally, SanDisk has a detailed Performing romance with https://www.washingtonpost.com/newssearch/?query=소액결제 Toshiba, which could see SanDisk fall or reduce the settlement if it managed to acquire Lexar.
Keep tune. A Specific shareholder Conference to review the takeover bid is moved to June 16. In my see, the $10 bid undervalues Lexar. Question is will a white knight floor?