Samsung drops SanDisk bid with venomous attack

 

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By Barry Collins

Posted on 22 Oct 2008 at 08:41

Samsung has withdrawn its hostile bid for SanDisk and launched a scathing attack on the memory chip maker.

After six months of terse negotiations, the two companies have failed to reach an agreement on a takeover.

Samsung was prepared to pay $5.9 billion for SanDisk, but now claims the deal represents poor value for money.

"Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organisation all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung," Samsung CEO Lee Yoon-woo wrote in a letter to SanDisk management.

"As a result of these developments, we are no longer interested in acquiring SanDisk at $26 per share."

In response, SanDisk claims that Samsung failed to enter meaningful takeover negotiations and questions the company's motives. "We repeatedly outlined a clear path to hold further discussions, including most recently in our letter on 15 September [following the hostile bid], and Samsung consistently chose to ignore that path and, in fact, never contacted SanDisk regarding its proposal after we delivered our letter," SanDisk claims in a statement.

"We believe this raises questions about the real motivations behind Samsung's offer."

SanDisk announced yesterday that it was including antivirus protection on its new range of USB flash drives.