Tue, Jun 21, 2016 - Page 14 News List

Inotera denies Micron deal price cut

MARKET REACTION:Inotera shares yesterday plunged on the Taiwan Stock Exchange after media reports that Micron is seeking to cut the acquisition price in the deal

Staff writer, with CNA

Inotera Memories Inc (華亞科), one of Taiwan’s leading DRAM chipmakers, yesterday denied media reports of a price reduction in its acquisition deal with the US company Micron Technology Inc.

There has been no recent discussion with Micron on cutting Inotera’s price per share from NT$30 to less than NT$20 in the deal, as reported in the Taiwanese media, Inotera said in a statement, adding that the two companies are working closely to complete the acquisition as soon as possible.

Shares of Inotera yesterday plunged on the Taiwan Stock Exchange after local media reported that Micron is seeking to cut the acquisition price in the deal, in which the Taiwanese firm agreed to sell a further 67 percent stake to Micron at a total cost of NT$130 billion.

Inotera shares dropped 2.49 percent to close at NT$25.45, with 112.54 million shares changing hands, although the broader market continued its upward momentum from the previous session, closing up 0.68 percent at 8,625.92 points.

“Despite the statement, many investors were worried that the deal might fall apart since the details remained murky,” equity analyst Vickie Hsieh said. “They simply dumped Inotera shares today to keep their cash on hand until a clearer picture of the deal emerges.”

The stock has been under pressure since June 8, when Micron said on its Web site that the acquisition was unlikely to be completed by middle of next month as planned, but it did not give any other details about the postponement.

On Monday last week, Inotera said the acquisition was proceeding well, but a new completion date had not yet been set.

Micron, a 33 percent shareholder of Inotera, is to fully acquire the Taiwanese DRAM maker, which is to become a subsidiary of Micron Semiconductor Taiwan Co (台灣美光), a unit of Micron.

According to local media reports, an acquisition price of NT$30 per share has been agreed on, based on Inotera’s earnings per share of NT$2.69 for the first nine months of last year.

However, the report said Micron was pushing to drop the price below NT$20 per share because Inotera had incurred a loss per share of NT$0.24 in the first quarter of this year due to a supply glut.

Inotera’s denial of the reports came in line with a similar statement by Nanya Technology Corp (南亞科), which holds a 24.2 percent stake in Inotera.

The two Taiwanese DRAM firms are the memorychip manufacturing arms of Formosa Plastics Group (台塑集團).

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