Samsung's plans to buy flash memory specialist SanDisk have been scrapped – and SanDisk's shares have taken a nose-dive on the news.
First spotted yesterday by BetaNews
, Samsung has released a public statement claiming that the decision to back out of its plans to buy SanDisk for a valuation of $26 per share was “made in considerations [sic] of the growing uncertainties in SanDisk's business, its stand alone value, and the current difficult economic climate.
While the company was vague in the extreme as to what exactly the “uncertainties in SanDisk's business
, Samsung CEO Yoon Woo Lee did claim to “continue to believe that a combination of our two companies would have created a superior global brand, an unparalleled technology platform and the scale and resources to drive convergence in the marketplace.
However, Lee goes on to highlight SanDisk's “recently announced third quarter results
” as cause for concern – which is fair enough, as SanDisk did
post a $155.2 million loss with sales down 20 percent compared to this time last year. Still, SanDisk must be seething about Samsung's scathing comments being made public – a move which can't have helped boost shareholder confidence and soften the blow of what CNet is claiming are planned job losses
at the company.
Samsung's decision to withdraw its offer doesn't mean we won't be seeing a counter-offer, of course: the wording of Lee's letter to the SanDisk board of directors is carefully worded when it says that “we are no longer interested in acquiring SanDisk at $26/share
” - which is very different to “no longer interested at all.” Indeed, it's entirely possible that this is merely aggressive bargining on Samsung's part, and that the company still believes that SanDisk could be purchased as a going concern – just for a little less money.
Are you still hoping that a Samsung-SanDisk collaboration will give birth to some exciting new technologies, or do you think that SanDisk can weather the storm and get through these tough times without Samsung's money behind it? Share your thoughts over in the forums