SanDisk Plans Partial Sale To Toshiba

Memory and storage manufacturer SanDisk said Monday that it has entered into a binding memorandum of understanding with Toshiba to sell about 30 percent of its current manufacturing capacity of the two companies' joint venture.

The move is expected to reduce SanDisk's capital spending and reduce NAND flash memory production commitments, SanDisk said.

In return, SanDisk expects to receive cash and to reduce equipment lease obligations by about $1 billion, it said.

SanDisk and Toshiba will continue to be equal partners in the remaining 70 percent of their joint venture and will continue to jointly invest, according to SanDisk.

The move comes about one month after Samsung made public its intent to acquire SanDisk with an offer that SanDisk immediately rejected as inadequate.

Samsung said at the time that it wished to acquire SanDisk with a cash offer of $26 per share, a 93 percent premium over SanDisk's share price on Sept. 4, when word of the offer was first reported in the press.

Jim Handy, an analyst with Objective Analysis, wrote in a report Monday that the asset-for-cash swap could be used by SanDisk to repurchase depressed SanDisk shares as a way to thwart Samsung's plans. However, how the deal fares will depend on the as-yet-unrevealed details of the agreement, Handy wrote.