Micron Technology will boost the exchange ratio of its
shares, from .5625 to .5925, to buy Flash memory specialist Lexar Media .
The increase, approved today by the Micron and Lexar boards, is designed
to appease shareholders who sought a higher valuation and will drive the
cost of the deal from $687.6 million to $815.6 million.
The new exchange ratio values Lexar at about $10 a share, based on Micron’s
share price Friday.
Lexar and Micron said in a statement they will promptly file with the
Securities and Exchange Commission and send updated proxy statement and
prospectus materials to Lexar shareholders.
Lexar will hold a special meeting of stockholders June 16 to discuss the
deal.
The enhanced bid is an attempt to quell shareholder concerns about the value
of Lexar.
Some shareholders, including billionaire investor Carl Icahn who owns 7.47
percent of Lexar, and Elliott Associates, which owns 7.5 percent of the
company, opposed the deal.
The deal, announced in March, would make Micron a formidable giant in the growing market for
Flash memory
Flash memory products allow people to store large amounts of music, images,
videos, and e-mails on mobile devices.
Many makers of handheld gadgets, such as MP3
players and digital cameras, covet the technology because data is retained even when power is cut off.
Micron competes with SanDisk, Samsung and Toshiba in this potentially
lucrative space. The buy is also a bailout for Lexar, which has struggled
in the market.
Shares of Micron jumped 26 cents to $16.72 before the market opened, while
Lexar leapt 20 cents to $9.82 before the bell.
Micron: There’s Value in Lexar
