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Elliott opposes Micron-Lexar deal

Posted: 23 Mar 2006     Print Version  Bookmark and Share

Keywords:Mark LaPedus  Micron Technology  Lexar Media  Elliott Associates  Elliott International 

Elliott Associates L.P. and its sister fund, Elliott International L.P., has acquired a 6.5 per cent stake in Lexar Media Inc. The hedge fund separately said that it opposes Micron Technology Inc.'s acquisition of Lexar.

As reported, billionaire financier Carl Icahn and other investors are also attempting to break up Micron's proposed Rs.3,009 crore ($680 million) deal to acquire Lexar. In a letter to the board of Lexar, Elliott Associates blasted the deal, claiming that the Micron-Lexar acquisition is worth Rs.6,637.50 crore to Rs.10,620 crore ($1.5 billion to $2.4 billion).

"Elliott is extremely displeased by the current Micron transaction, in which Lexar shareholders are to receive 0.5625 Micron Technology shares per each company share, as we strongly believe this transaction significantly undervalues Lexar," according to the letter.

"While we firmly disagree with the level of consideration offered to Lexar shareholders in the Micron Transaction, we fully agree with the premise of selling the company," the letter stated. "As presented in our analysis, Lexar is worth significantly more to an acquirer than it is on its own and a sale of the company can unlock meaningfully greater shareholder value than continuing as a standalone entity."

- Mark LaPedus
EE Times

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