Spansion Sets IPO Terms

The company will offer about 35 million shares.
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Flash-memory maker

Spansion

, the joint venture between

Advanced Micro Devices

(AMD) - Get Report

and

Fujitsu

, will sell 35.3 million shares of Class A common stock in its upcoming initial public offering, the company announced Friday.

The Sunnyvale, Calif.-based company expects to price the shares between $16 and $18 each. The stock will be listed on

Nasdaq

under the symbol SPSN.

Under the terms of the deal, AMD will own 40% of all outstanding shares and have the right to appoint two directors through its ownership of all Class B shares. Fujitsu will have a 26.7% stake, with its Class C and D common stock holdings entitling it to elect one director.

Concurrent with the IPO, Spansion plans to issue up to 8 million shares of convertible stock priced at $25, and its Spansion LLC unit will issue up to $400 million in senior unsecured notes in a private placement.

The lead underwriters, Citigroup and Credit Suisse First Boston, will have an option to purchase an additional 5.2 million shares of the Class A common stock and 1.2 million of the convertible stock to cover over-allotments.

The company said it expects to raise $561 million from the offering, after underwriting fees and based on a $17 price. The convertible stock is expected to bring in an additional $193 million.

The proceeds will go toward working captial, captial expenditures and general corporate purposes.

Spansion, which makes NOR flash memory, lost $20 million in fiscal 2004 on net sales of $2.3 billion.

Despite a steady six-month run-up in shares of AMD, analysts have been

nervous about the prospects -- and timing -- of a Spansion IPO, due to the volatility of flash itself and Spansion's ongoing losses.

Shares of AMD were recently off 10 cents to $24.40.