Management looking out for their shareholders. What a concept!!!
Shares of flash memory card maker SanDisk Corp. soared Wednesday, a day after the company rejected a $5.9 billion bid by Samsung Electronics Co Ltd.
Milpitas-based SanDisk (NASDAQ: SNDK) was up about 45 percent in mid-morning trading to $21.60.
Samsung currently pays SanDisk about $350 million a year in royalties to use its flash technology, and SanDisk said that while Samsung's $26-a-share cash offer -- which represents an 80 percent premium to its Monday close -- undervalued the company, it would be open to discussing an offer that recognized SanDisk's "intrinsic value."
In a letter to Seoul, Korea-based Samsung vice chairman and CEO Yoon-Woo Lee, SanDisk said the offer is “an opportunistic attempt to take advantage of SanDisk’s current stock price.” The board said the stock price is “depressed” because of business cycles in the industry.
Eli Harari, chairman and CEO of SanDisk said, “We believe Samsung’s proposal does not provide appropriate value to our stockholders and is opportunistically timed at the trough of an industry-wide downturn. We believe we have the strategy, execution record, innovation and financial resources to return to profitable growth and be the flash memory leader in new growth markets in mobile devices, solid state disk, and portable consumer electronics.”
SanDisk is advised by Goldman Sachs Group Inc. and Morgan Stanley