SanDisk WD Deal Up In The Air After Chinese Investor Pulls Out
The future of SanDisk is up in the air after a Chinese Company pulled out of an A$5.4 Billion-dollar investment in Western Digital the Company that stuck their hand up last year to buy the struggling memory manufacturer.
Dumped by Apple SanDisk was struggling to deliver growth when Chinese firm Unisplendour moved to invest in Western Digital.
The investment by Unisplendour, which would have acquired a 15% stake in Western Digital, was terminated following a decision by the Committee on Foreign Investment in the U.S. to investigate the proposed investment.
The move to quit their investment in the US storage Company means the deal to buy SanDisk will require a Western Digital shareholder vote, which wasn’t a requirement of the tie-up if the Unisplendour investment had gone through the Wall Street Journal claims.
Alken Asset Management Ltd a major shareholder in Western Digital, had urged the US Company to walk away from its deal with SanDisk, saying the price tag was too expensive.
Despite the setback, Western Digital is still saying that they want to go ahead with the SanDisk buyout despite a recent plunge in the value of Western Digital stock.
With the unravelling of the Unisplendour deal, Western Digital is set to pay $67.50 a share in cash instead of $85.10 to buy SanDisk, and will increase the amount it will pay in stock to 0.2387 share from 0.0176.
As of Monday’s closing prices, the offer is valued at $78.50 a share, compared with the previous terms’ $85.91 a share.
Zhao Weiguo, chairman of Unisplendour’s parent company Tsinghua Unigroup, said on Tuesday that he felt the deal would have been detrimental to both companies’ investors.