NEW YORK (TheStreet) -- Western Digital (WDC) - Get Western Digital Corporation Report stock is increasing by 4.22% to $45.98 in afternoon trading on Friday, as a top shareholder urges the company to drop its proposed acquisition of SanDisk (SNDK).
The investor Alken Asset Management, a London-based hedge fund, believes that the $19 billion merger is too pricey, the Wall Street Journal reports. The hedge fund owns about 2.2% of Western Digital.
Analysts have questioned demand for SanDisk products, and the average estimate for SanDisk's 2016 earnings has declined to $2.95 per share from $6.18 per share during the past year.
Western Digital shares have tumbled about 40% since the companies first announced the deal in October, underscoring investors' concerns about the deal, the Journal adds.
"Because of changes in SanDisk's markets and business, as well as capital market factors, the price has proven to be simply too high," Alken wrote to the Western Digital board, the Journal notes.
Western Digital would have to pay a $185 million breakup fee if it terminates the deal, which Alken deemed "relatively small."
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Western Digital's strengths such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations are countered by weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
You can view the full analysis from the report here: WDC
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.