has withdrawn its proposal to acquire SanDisk for $26 a share in cash, saying there were "growing uncertainties" in SanDisk's business and SanDisk's greater-than-expected third-quarter loss is an illustration of that risk.
"Your surprise announcements of a quarter- billion dollar operating loss, a hurried renegotiation of your relationship with
and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a standalone basis as well as to Samsung," wrote Yoon Woo Lee, Samsung's CEO, in a letter to SanDisk's board. "As a result of these developments, we are no longer interested in acquiring SanDisk at $26/share."
SanDisk, a flash memory card maker, late Tuesday said it remained open to a transaction with Samsung from the beginning of the process. SanDisk said it "repeatedly outlined a clear path to hold further discussions," including most recently in a letter in mid-September.
"Samsung consistently chose to ignore that path and, in fact, never contacted SanDisk regarding their proposal after we delivered our letter. We believe this raises questions about the real motivations behind Samsung's offer," SanDisk said in a statement.
On Monday, SanDisk posted a greater-than-expected loss in the third quarter, as prices for its flash memory chips plunged 30% quarter over quarter. SanDisk reported a net loss of $155.2 million, or 69 cents a share.
SanDisk's also said Monday that Toshiba was buying 30% of its manufacturing capacity at a pair of chip factories that the two firms jointly own.
Shares of SanDisk closed Tuesday at $14.76.