On Friday, flash media maker Lexar Media (LEXR) gained an increased revised takeover bid from Micron Know-how (MU). The revised bid destinations the all-inventory exchange present at all-around $10 a share, up marginally through the initial bid.
But significant shareholders which include billionaire investor Carl Icahn in conjunction with hedge resources and portfolio supervisors have considered the First bid to get inappropriate. Elliott Associates believes the Preliminary bid “appreciably undervalues Lexar,” and feels Lexar is value in between $one.five billion and $2.four billion. The estimate is very well above the revised takeover bid of about $827 million.
I must concur and say the revised takeover bid is way far too minimal and should be rejected by shareholders. Micron desires to shell out close to one.10x profits for Lexar when the market leader SanDisk (SNDK) is buying and selling at four.35x product sales. Lexar also provides a $400 million patent infringement lawsuit from Toshiba that it had Beforehand received but is now matter to an charm by Toshiba.
Think about it this way, An effective $400 million settlement in favor of Lexar would equate to close to $four.83 for every share in added cash to incorporate to The present $0.fifty four in free of charge dollars after credit card debt that Lexar has. What this means is Micron would pay back a lot less than $5 a share for Lexars property, which happens to be minimal.
There is certainly also speculation that SanDisk is very seriously thinking about taking a operate at acquiring Lexar. This could sound right considering the fact that SanDisk would solidify its leadership position.
Moreover, SanDisk has a close Operating connection with Toshiba, http://query.nytimes.com/search/sitesearch/?action=click&contentCollection®ion=TopBar&WT.nav=searchWidget&module=SearchSubmit&pgtype=Homepage#/소액결제 which could see SanDisk fall or decrease the settlement if it managed to amass Lexar.
Keep tune. A Specific shareholder Assembly to review the takeover bid continues 소액결제정책 to be moved to June sixteen. In my perspective, the $10 bid undervalues Lexar. Issue is will a white knight surface area?