Samsung makes a hostile bid for SanDisk

We'd heard rumors Samsung was wooing SanDisk, but it looks like the four-month courtship is over -- Samsung just announced that in response to SanDisk's "unrealistic expectations" during negotiations, it's going hostile and will offer $26/share for the company. That's bound to cause some waves in the storage industry, especially since Toshiba and Seagate were also rumored to be interested in SanDisk. We'll see what happens -- things always get a little crazy when there's nearly six billion dollars in cash on the table.

[Thanks, Marshall84]

Update: SanDisk's board rejected the bid unanimously, saying the bid undervalues the company and is, like, totally uncool, man.

Read - WSJ article
Read - Samsung letter to SanDisk

[Hellaphunt @ Sep 16th 2008 6:16PM]

I want to be SanDisk right now.

[Nick J @ Sep 16th 2008 6:21PM]

I want to be an owner of a few million shares of SanDisk right now...

[Engadgetier @ Sep 16th 2008 6:37PM]

*Game Show Host Voice* "Well now you can, just play Wheel of Fortune 500 and you can win any company you want!"

on subject, i like SanDisk! NO SanDisk for Samsung!

[Temple @ Sep 16th 2008 10:22PM]

You wouldn't want to be Sandisk since its having problems, which is the reason why its ripe for take-over.

The majority of their revenue is IP and royalty payments, most of which come from Samsung in the tune of around $414 million for this year. If they are taken over then clearly they won't need to pay that sum. So any money Sandisk can make off the sale (which is expect to be over a billion), the amount has to be subtracted from the loss of revenue it'll get from royalties (also, think it expects to get $303million from Samsung next year). For Samsung it makes a lot of sense (what they pay is larger then the market cap of the company), but for Sandisk not so much (hence the rejection of the bid).

Also, there is the situation with the joint operations Sandisk has started with Toshiba. A situation that perhaps can get ugly if handled poorly.

[Flashpoint @ Sep 16th 2008 6:17PM]

This way Samsung can put an end to sandisk's competition in the MP3 and flash memory markets.

[JohnTitor @ Sep 16th 2008 7:57PM]

well in terms of consumer level flash memory (ie SD cards) and MP3 players, SanDisk was doing better than Samsung, I think they should keep the brand. But would be happier if it didn't happen, I'd rather Seagate take em cause at least its a mixing of two different markets and not the killing of competition

[gad get @ Sep 17th 2008 12:37AM]

I think this could be great for the mp3 market. With Samsung's strengths mixed with the strengths of the Sansa line, you could end up with a $200 16-gigabyte Fuze-P2! Here's to dreaming! :D

[who? @ Sep 16th 2008 6:24PM]

I like SanDisk and Samsung, but I don't thing they will be as good (for consumers) if they join together. I mean, SanDisk was always more of the memory card/flash drive company, that offered cards that worked with many company's devices. If Samsung take them over, what would stop them from making all of the cards only compatible with their products? Why can't we all just get along?

[sigh]

[iEye @ Sep 16th 2008 6:35PM]

Something something Apple...

too easy...

[Jaws @ Sep 16th 2008 7:55PM]

I think the thing that would stop them from doing something silly like that would be easy... take a look at Sony... the 'massive' adoption of MemoryStick type products.... then slowly back away from the idea until at a comfortable distance, and then turn, and run screaming to SD and CF again.

Prop. tech sucks (thanks for all the memories Sony and Apple).... generic standards regulated by the industry as a whole for the win! :D

[ehisforadam @ Sep 16th 2008 8:49PM]

The fact that SanDisc would no longer be a flash memory giant if they suddenly started only making memory that only worked with company's products?

[Sameer Surampalli @ Sep 17th 2008 12:16AM]

@ Jaws,
If you don't recall, MemoryStick is a joint operation by SanDisk and Sony... Sony's not the only brains behind the stupid memory format.

[strider_mt2k @ Sep 16th 2008 6:26PM]

UGH!

Then they'll be evil AND weak. (Like Grima Wormtongue)

[Beaver Of Love @ Sep 17th 2008 9:52PM]

That is a pretty cool comparison.
And kinda scary.

[Cody @ Sep 16th 2008 6:40PM]

Sandisk stock is up $8.71 today. Phew.

[Funkfrost @ Sep 16th 2008 6:38PM]

What will happen to the Sansa line of MP3s, would they discontinue them when they have a 10% marketshare,or will Samsung integrate them into their own line of players?

[Robot Overlord @ Sep 16th 2008 7:45PM]

I hope not. i love their mp3 players, especially the fact that they have a mechanical scroll wheel

[z0phi3l @ Sep 16th 2008 6:41PM]

Better Samsung than Toshiba or Seagate

[BigD145 @ Sep 16th 2008 6:41PM]

I never really liked SanDisk. Their solid state storage tended to have a higher failure rate and the software for their CF wifi cards were crap.

[gad get @ Sep 17th 2008 12:40AM]

Hm?

[Annyong ha shimnikka @ Sep 16th 2008 6:42PM]

hahhahahahha this is funnyy.... NOT
I've had it with this company

[Mam00th @ Sep 16th 2008 6:58PM]

And I've had it with those motherfucking snake on this motherfucking plane.

[Haikibutsu @ Sep 16th 2008 6:46PM]

Jeez, Samsung is really big! I don't see why they haven't established franchises like Nintendo, entire entertainment studios like Sony, established a near monopoly like Microsoft, or even made a game console.

Also, off topic, but why did phanbouy get banned (possibly) just for 1 silly post, while it took ages to ban Clak and iEye and iPhone, and Flashpoint nor the other iPhone haven't been banned yet?

[Engadgetier @ Sep 16th 2008 7:04PM]

Phanbouy was banned?!?!? im going to start a petition to get him back!!!

[Ian @ Sep 16th 2008 8:05PM]

no hes still here.. umm i think he posted one story up if i remember right

[phanbouy @ Sep 16th 2008 8:06PM]

rumors of my banning have been greatly exaggerated

[iEye @ Sep 16th 2008 8:11PM]

They killed me, but they did not Ban me!

[gad get @ Sep 17th 2008 1:09AM]

*GASP!* It's iEye's vengeful ghost back from the underworld to reap destruction and such on the souls of Engadget's comment boards! Oh, if only Engadget had thought to ban him as well as kill him!

[gad get @ Sep 17th 2008 1:10AM]

(You can tell he's a ghost because he's quite faint.)

[DarCowAlways @ Sep 16th 2008 6:49PM]

Haha, SamDisk. Props to the photoshopper!

[Eric @ Sep 16th 2008 7:09PM]

This has been going on for some time. It is no surprise as they were thinking about it for some time. I saw this awhile back at

http://zollotech.com/content/samsung-seeks-serious-sandisk-assimilation

Monopolies are never a good thing. I wonder why they are choosing this route? To increase profits or crush the competition?

[f2point8 @ Sep 17th 2008 8:44AM]

If there were no mergers MBA's would have nothing to do.

[Photoshop @ Sep 16th 2008 9:21PM]

YAY!

I am a SanDisk stock holder. I've taken a huge loss on the stock in the past months, and this buyout won't even come close to make up my losses, but at least it's something!

[Anthony @ Sep 16th 2008 11:12PM]

Rejected. Apparently paying more for stock highlights their "undervalued" offer.

[3dpenguin @ Sep 16th 2008 9:24PM]

I hope this doesn't go through, Samsung Memory and Flash technology is overpriced junk most of the time, and they'll just end up dragging down SanDisk.

[jitty @ Sep 16th 2008 10:52PM]

Screw you samsung! Stop trying to monopolize! If this goes through, I'm never going to buy another samsung product.

[gad get @ Sep 17th 2008 1:03AM]

I'm with you, jitty-boy! And I'M never going to use another Apple, Toshiba, Sony, Panasonic, Philips, LG, Nokia, Microsoft, Nintendo, Pioneer, HP, Acer, Seagate, Adobe, Google, Dell ---*gasp*--- Mitsubishi, 3M, RCA, RIM, JVC/Victor...

*1 hour later*

"...IBM, Hitachi, Cisco Systems, or Intel product ever again, because they're ALL capitalist douchebags just like Samsung!"

[jitty @ Sep 17th 2008 8:00PM]

@ gad get

Kid, please learn the difference between "capitalism" and "monopolizing" before you start running your fingers across that keyboard.

[gad get @ Sep 18th 2008 12:46AM]

First of all, what makes you think I'm a 'kid'? And second, I'm not as stupid as you [like to] think; I know what those words mean, but unlike you I'm not naive enough to expect CAPITALIST (you DO know what that means, right?) companies to not try to increase their own size and power when they get the chance. That's supposed to happen. That's how capitalism is supposed to work! THAT'S WHY IT'S CALLED FREAKIN' CAPITALISM... KID!

[CL @ Sep 16th 2008 11:16PM]

LOL @ Samsung's cheastbeating:
"...we remain prepared to acquire all of the outstanding shares of SanDisk for $26 per share in cash. As you know, our proposal is not subject to any financing contingency and the entire purchase price will be funded with our cash on hand and available financing"

Under M&A regulations, the acquirer must provide evidence of certainty of funding. This is a means of ensuring the acquirer is serious about their offer, and also to provide a guarantee to the target shareholders that their decision to accept the offer will be executed. 99.9% of the time, the acquisition is funded by third party loans. In Samsung's offer, they're basically saying, "... listen fool, we dont need to borrow money, we have enough cash just sitting around to buy you out... quit the games and just fold already..."

I wish I had some loose change sitting around to make a $5.8 billion hostile takeover.

[nikster @ Sep 17th 2008 3:29AM]

Seems like a bargain at $6Bn...

[iblack @ Sep 17th 2008 4:19AM]

How to become famous like phanbouy ?????
I'm using an iPhone

[WL @ Sep 17th 2008 6:30AM]

These large corporations are like rapist, if they can't get what they want they try and take it by force.

[erislover @ Sep 17th 2008 9:25AM]

Offering someone money for goods, services, or assets and having them accept your terms is not a particularly good definition of "force."

[WL @ Sep 17th 2008 9:55AM]

Trying to bribe shareholders after having your offer rejected by a companies board sounds a little like fore to me, otherwise monopolistic companies don't "force" consumers to buy their products either.

[Nelson @ Sep 19th 2008 2:53AM]

Personally I think baskins robins should take over, ice cream and technology how amazing!