On Friday, flash media maker Lexar Media (LEXR) received a greater revised takeover bid from Micron Technological innovation (MU). The revised bid sites the all-stock Trade present at all over $ten a share, up marginally within the initial bid.
But key shareholders together with billionaire investor Carl Icahn along with hedge resources and portfolio supervisors have deemed the Preliminary bid to be inappropriate. Elliott Associates believes the First bid “substantially undervalues Lexar,” and feels Lexar is worthy of in between $one.five billion and $two.four billion. The estimate is properly previously mentioned the revised takeover bid of about $827 million.
I must concur and say the revised takeover bid is way way too reduced and must be turned down by shareholders. Micron hopes to shell out all around one.10x profits for Lexar though the click here marketplace chief SanDisk (SNDK) is trading at four.35x gross sales. Lexar also features a $four hundred million patent infringement lawsuit in opposition to Toshiba that it had Earlier gained but is currently topic to an charm http://query.nytimes.com/search/sitesearch/?action=click&contentCollection®ion=TopBar&WT.nav=searchWidget&module=SearchSubmit&pgtype=Homepage#/소액결제 by Toshiba.
Think it over in this manner, An effective $400 million settlement in favor of Lexar would equate to about $four.eighty three per share in further dollars to add to The present $0.54 in cost-free hard cash after personal debt that Lexar has. What this means is Micron would pay out under $5 a share for Lexars property, which can be very low.
There is also speculation that SanDisk is critically considering using a run at attaining Lexar. This may seem sensible due to the fact SanDisk would solidify its Management situation.
Moreover, SanDisk has a close Operating connection with Toshiba, which could see SanDisk fall or lessen the settlement if it managed to acquire Lexar.
Remain tune. A Particular shareholder Assembly to evaluation the takeover bid has been moved to June 16. In my look at, the $10 bid undervalues Lexar. Problem is will a white knight surface?