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Oh my Tosh: SanDisk chatted to 3 other buyers before WD slurp

Who are companies A, B, C and D? We have a guess...

Comment Three other potential buyers were circling around SanDisk when it was being bought by Western Digital Corporation.

A WD S-4 registration statement filing reveals Companies A, B, C and D were also involved in a potential purchase of SanDisk during the period in which it talked about a buy.

The WD and SanDisk CEOs first met on 23 February, 2015, and this meeting was instigated by WD CEO Steve Milligan. At that point Company A and SanDisk were already talking about Company A potentially buying SanDisk.

SanDisk first talked to Company A between December 5, 2014, to October 2, 2015, after Company A contacted SanDisk about a possible deal. Company A was given access to confidential information about SanDisk's affairs and its joint venture with Toshiba for producing flash chips.

However, the company never got any further than indicating potential interest, not submitting an offer nor giving a timeline for an offer submission. It dragged its feet in other words.

We think it's possible that Company A was Seagate. And it's also possible that WD got wind of these talks and so made its own approach to SanDisk.

Company B's CEO contacted SanDisk CEO Sanjay Mehrotra on 1 August 2015, quite late in the day, and "they discussed Company B’s interest in exploring potential business and strategic opportunities with SanDisk".

The two CEOs met on 12 August to discuss this but Company B's boss declined to pursue any arrangement with SanDisk on the next day, 13 August. It obviously wasn't that great a meeting or something was said that stopped Company B in its tracks.

We think it was possible that Company B could have been a storage flash systems supplier anxious to vertically integrate its flash products downwards to fab level.

Company C is identified by SanDisk as a private equity firm and its representatives met SanDisk's CEO and chairman "to discuss the general industry environment and to explore the possibility of strategic transactions with Company A or Company D that might include the financial participation of Company C". SanDisk decided against this.

Company D first talked with SanDisk about a potential business combination on April 30, 2015. WD states that SanDisk has joint ventures with Company D. We are confident this is a reference to the flash foundry joint ventures between SanDisk and Toshiba, with Company D being Toshiba.

In El Reg's opinion, both Seagate and Toshiba were interested in buying SanDisk but both decided against making any firm offer. The third interested party is a mystery to us. It might conceivably have been Micron or even Intel, with both looking to increase their flash foundry capability.

In essence, Western Digital was almost involved in an auction for SanDisk but, due to foot-dragging for one reason or another, an outright bidding war didn't take place.

Western Digital agreed to buy SanDisk for $86.50 per share of SanDisk common stock, and the deal was publicly announced on October 21, 2015. ®

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