Western Digital investor Alken pushes to cancel SanDisk deal
Reuters
Published Feb 22, 2016 12:13PM ET
Western Digital investor Alken pushes to cancel SanDisk deal
(Reuters) - Alken Asset Management, one of the biggest shareholders of hard-disk drive maker Western Digital Corp (O:WDC), has asked the company to consider cancelling its deal to buy SanDisk Corp (O:SNDK), citing a high purchase price.
Western Digital agreed to buy SanDisk in a $19 billion deal in October to help increase its ability to make flash memory storage chips used in smartphones and tablets.
The London-based investment manager, Alken Asset, said weakness in the storage chip market has hurt Sandisk's stock price which in turn will hurt Western Digital if the deal goes through.
"The price being paid for SanDisk is excessive in light of the changing landscape for SanDisk's products and capital markets considerations," said Vincent Rech, analyst at Alken Asset Management.
Shares of Western Digital have fallen about 40 percent since the deal was announced. They were up 3.39 percent in afternoon trading.
SanDisk's stock has dropped about 16.5 percent year-to-date as it grappled with falling prices in the flash memory market and lean inventory levels.
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Written By: Reuters
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