(Reuters) – Chipmaker Micron Technological innovation Inc (MU.O) and challenging disk drive maker Western Digital Corp (WDC.O) are in talks with memory chip maker SanDisk Corp SNDK.O about a possible acquisition, Bloomberg noted on Tuesday.
The Sandisk Corporation emblem is viewed as component of a screen at the Microsoft Ignite engineering convention in Chicago, Illinois, Could 4, 2015. REUTERS/Jim Younger
SanDisk, valued at about $12.six billion as of the stock’s close on Tuesday, has hired a financial institution to assistance with the process, Bloomberg noted, citing resources acquainted with the matter.
No selection has been manufactured and the talks may perhaps not result in a transaction, Bloomberg noted.
Shares of SanDisk – which would make flash-memory items for cloud computing, knowledge centers, smartphones and laptops – rose 12 p.c to $69.twenty in prolonged buying and selling on Tuesday. Micron was up three p.c and Western Digital underneath 1 p.c.
SanDisk, Western Digital and Micron had been not immediately readily available for remark.
Micron and Western Digital appeared “perplexing” suitors for SanDisk, Wedbush Securities analyst Betsy van Hees claimed, adding that Micron presently experienced a substantial flash memory operation.
Western Digital mostly would make conventional challenging drives. SanDisk’s flash-memory chips are used in good-condition drives, which are speedier and a lot more trustworthy than conventional challenging drives.
A Chinese conglomerate could be the most interested social gathering to probably get SanDisk, van Hees claimed, as China appears to be like to stage up its modest but up-and-coming chip field.
China’s condition-backed Tsinghua Unigroup Ltd, a engineering conglomerate, has been pursuing Micron, according to media reviews. It has offered $23 billion for Micron, but the program has been clouded by U.S. security problems.
Tsinghua’s unit claimed in late September it would spend $three.seventy eight billion in Western Digital, worthy of a 15 p.c stake. Analysts have claimed the income infusion could let Western Digital to take larger ways in flash and good-condition storage, its vital curiosity areas.
SanDisk’s stock has dropped about 37 p.c calendar year-to-day as the company grappled with slipping rates in the flash memory sector and lean inventory amounts.
A hold off in gross sales of specific embedded pieces used in good-condition drives has also weighed on the company’s final results.
Milpitas, California-based mostly SanDisk would reject any provide that was less than $ninety for every share, Nomura analyst Romit Shah experienced claimed past 7 days.
Reporting by Subrat Patnaik and Sai Sachin R in Bengaluru Modifying by Savio D’Souza