Seagate's after-market share price has been added to this story.
SCOTTS VALLEY, Calif. (
has ended discussions with private equity firms about taking the company private, explaining that the likely valuation was not in the best interest of the storage specialist and its shareholders.
Shares of Seagate were halted this afternoon prior to the announcement, which was made after market close. The company's stock closed down 3 cents, or 0.22%, at $13.86 in regular trading.
Seagate's stock, however, slipped further when trading resumed, falling 86 cents, or 6.2%, to reach $13. Rival
was also down in extended trading, dipping 37 cents, or 1.1%, to $33.35.
"We appreciate the interest shown by the private equity firms and our dialogues with them were extensive and thoughtful," explained Steve Luczo, Seagate's CEO, in a statement. "However, management and the Board have chosen to cease discussions concerning a private equity-led leveraged buyout. Given the strong debt markets, improving business conditions and other financing options, Seagate has initiated a plan to further optimize its capital structure to maximize shareholder returns."
Seagate's board also authorized a $2 billion share repurchase after market close. According to Seagate, the repurchase will be funded through a combination of cash on hand, future cashflow from operations and "potential alternative sources of financing."
Additionally, the hard drive maker gave fiscal second-quarter guidance, predicting revenue of at least $2.7 billion and a gross margin of at least 19.5%. Analysts surveyed by Thomson Reuters are looking for sales of $2.7 billion and earnings of 29 cents a share.
Chatter about Seagate's long-term plans has swirled around the company for months. In September
causing a significant spike in the company's shares.
Seagate, which describes itself as the world's largest manufacturer of hard drives, has a market cap of $6.55 billion.
--Written by James Rogers in New York.
>To follow the writer on Twitter, go to
>To submit a news tip, send an email to: