SanDisk Corp. (NASDAQ: SNDK) is seeing a surge on reports that Samsung is considering a tie-up or other alternatives with the company to secure its flash memory supply. Samsung said it is considering various opportunities after reports that a deal may come. While this is good news for newer shareholders, there are no assurances that SanDisk management nor shareholders would go along with a merger anywhere close to current prices.
SanDisk shares closed down at $13.46 yesterday and have fallen by more than 75%from the $56.46 highs. Even if Samsung was willing to come in with a$20.00 bid, this premium may not be enough to make the company agree toany such deal because it would still wipe out many existingshareholders. The recent lows were more than 5-year lows. Samsungmight have to consider taking a large stake in the company and considerother options down the road.
So far we have seen over 2.7 million shares trade hands with gains looking up 26% at $16.95 pre-market.
Jon C. Ogg
September 5, 2008