IDG News Service —
Samsung has published a letter detailing its proposal to buy SanDisk and complaining about SanDisk's "unrealistic expectations" about its value.
Samsung is offering SanDisk US$26 per share in cash and says that a combination will help boost SanDisk's flagging financial results. "Our offer insulates your shareholders from the risk of market conditions that have severely deteriorated and are expected to remain challenging," said the letter, addressed to SanDisk's chairman and CEO Eli Harari and vice chairman and lead independent director Irwin Federman. The letter is signed by Yoon-Woo Lee, vice chairman and CEO of Samsung.
Samsung says that the companies have been in discussions for four months about a possible combination, but that it decided to take the offer public after growing concerned about a lack of progress in working out a cooperative merger agreement.
A combination of the companies would create a powerful global brand and allow the resulting company to position Flash as the preferred technology for delivery and storage of content, Samsung said.
While Samsung wrote that SanDisk is a technology leader and has an innovative culture, it also argued that independently investing in the necessary facilities required to further technology innovation would be a significant tax on SanDisk's business.
Samsung would continue to operate SanDisk as a separate subsidiary and would not plan to lay off workers if the deal goes through, it said.
Rumors of talks between the companies surfaced earlier this month. The rumors came as the companies battle each other in court over the termination of a patent licensing agreement.
SanDisk has not yet issued a statement in response to Samsung's letter. In early September, after speculation about talks between the companies, SanDisk said that it periodically has conversations with multiple parties, including Samsung, regarding various business opportunities.
