Western Digital to accumulate $3.09 billion through Sandisk equity disposal. Western Digital Corp. intends to generate $3.09 billion via the divestiture of an equity interest in Sandisk Corp., a flash storage division divested almost a year prior.
The equities are being presented at a valuation ranging from $535 to $555 per unit, according to individuals knowledgeable about the situation, denoting a reduction of roughly 9.4% relative to Sandisk's closing price of $590.59 per equity on the preceding Tuesday.
The proposition experienced considerable oversubscription subsequent to a private marketing effort, the sources stated, who preferred anonymity due to the confidential nature of the details.
Sandisk declared the proposition on Tuesday on behalf of its former parent entity, without divulging the quantity of equities being sold. The firm had previously listed 7.51 million equities — Western Digital’s complete stake — in documentation submitted to the U.S. Securities and Exchange Commission (SEC).
Western Digital is anticipated to exchange Sandisk equities for obligations held by subsidiaries of JPMorgan Chase & Co. and Bank of America Corp., the announcement indicated. The banks will subsequently vend the equities to the underwriters of the proposition they represent.
The agreement transpires on a stringent timeline for Western Digital: the company is compelled to divest its equity within a year following the Sandisk spin-off to avert fiscal ramifications. Sandisk equities declined approximately 3% to $574.10 as of 7:01 p.m. Tuesday in after-hours trading, whereas Western Digital equities demonstrated minimal alteration at $283.33.
Representatives from Western Digital and Sandisk did not promptly acknowledge requests for remarks.
Sandisk has profited from a worldwide memory chip deficit, partially propelled by a surge in expenditure on artificial intelligence. Increasing requirement for Sandisk's flash memory offerings, employed within computers and cellular devices, is projected to substantially augment its revenue escalation this annum.
Sandisk has been the foremost performing equity within the S&P 500 index this year, ascending 149% as of Tuesday's market closure.
Western Digital CFO Chris Sennesael communicated last month that the entity intends to liquidate the outstanding equities by the anniversary of the spin-off. The spin-off officially concluded on February 24 of the preceding year.
As per the declaration, the placement is being spearheaded by JPMorgan and Bank of America.
Source: Reuters