SanDisk Gets Buyout Offer (Update)

SanDisk(SNDK Quote), shares surged more than 50% in extended trading Tuesday, after Samsung went public with an offer to purchase the chipmaker for $26 a share.

In an announcement after Tuesday's close of market, Samsung sought to turn the heat up on SanDisk by laying its case out to shareholders as discussions between the two companies appeared to have reached an impasse.

After four months of negotiations, SanDisk "continues to cling to unrealistic expectations on both its standalone market value and an appropriate merger price," Samsung CEO Yoon-Woo Lee said in a letter to SanDisk's board of directors dated Sept. 17.

Citing what he contends is SanDisk's reference that the offer undervalues the chipmaker relative to its 52-week high of $55.98, Lee said "the world has changed dramatically in the past 52 weeks as can be seen from SanDisk's own disappointing results."

SanDisk fired back with its own statement, accusing Samsung of attempting to take advantage of its current stock price "which is significantly depressed given industry cyclicality," and suggesting that the offer is a "calculated ploy" by Samsung to gain leverage in the ongoing licensing negotiations between the two chipmakers.

What's more, when Samsung initially approached SanDisk on May 22, the company said it was willing to pay a significant premium to SanDisk's $28.75-a-share closing price that day, SanDisk said.

South Korea's Samsung is the world's No.1 maker of NAND flash memory, a type of chip that is increasingly popular in electronic gadgets like cell phones, digital cameras and MP3 players like Apple's(AAPL Quote) popular iPod.