Western Digital's Offer to Take Over Seagate Turned Down
06 Dec, 2010, 11:22 am IST | by
Siddharth Basrur
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Seagate Technology Plc has been in demand for a while now, but it doesn’t look like they’re going to take any old offer. According to Bloomberg, Seagate just rejected an offer made by Western Digital, one of its biggest rivals. Western Digital getting too big for its boots? Seagate recently also turned down a huge offer from one of the largest private equity investment firms in the world, TPG Capital. Although an offer of over $7.5 billion was made, Seagate turned it down as the deal was reportedly not in the best interest of the company and its investors. On the other hand, Western Digital made a bid to buy Seagate, offering 10-50 percent more than TPG Capital, but the latter apparently refused to move from its stance. Seagate has been valued at $6.9 billion, which is only a little less than Western Digital, which is worth $8 billion. While a lot of people may think that this proposal from Western Digital was a little too ambitious, the deal would’ve been a huge one for Western Digital had it gone through. However, it would also have had some serious repercussions. Ashok Kumar, an analyst at Rodman & Renshaw LLC said, “I’m not sure how that would serve Seagate’s shareholders. There’s way too much product overlap, and I’m not sure the premium would be meaningful enough to make it worth it. I think they have to make a go of it on their own.” |
Tags: Western Digital , Seagate , Takeover , Merger , Acquisition
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