Since most of us are interested in whats going on in the disk components industry, here is a little something . . .
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Late Monday, APPLIED MAGNETIC CORP. (APM: 50, - 3) and
READ-RITE CORP. (RDRT: 33-3/8, + 1-3/8) agreed to merge in a deal valued at $1.76 billion, or $37.50 per Read-Rite share.The combination of the two companies, said Applied, would result in a supplier of disk heads with $1.8 billion sales per year, and an equity market capitalization of of $3.4 billion.
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GOLETA, GA., Feb 24 (Reuter) - Applied Magnetic Corp
said on Monday that it has proposed a merger with Read-Rite
Corp .
Under the proposed terms of the deal, Read-Rite
shareholders would receive 679 common shares of Applied
Magnetics for each Read-Rite share.
Based on the closing price of Apllied Magnetics on Feb 21,
the exchange ratio would produce a value of $37.50 for each
Read-Rite share, said Applied Magnetic.
o Read-Rite). A corrected repetition follows.
Applied said that it would proceed with a consent
solicitation aimed at replacing Read-Rite's current board of
directors with a new board that would, subject to their
financial duties, endorse the transaction.
The combination of the two companies, said Applied, would
result in a supplier of disk heads with $1.8 billion sales per
year, and an equity market capitalization of of $3.4 billion.
Applied also said that cost savings, manufacturing
efficiencies and revenue enhancements from the combination
would provide incremental gains in pretax earnings of more than
$100 million in the 12 months following the transaction.
The total value of the deal, according to an Applied
Magnetic spokesman, is $1.76 billion. Read-Rite (corrects
company name) has about 47 million shares outstanding.
Speaking of the merger, the Applied Magnetic spokesman
said, "Our intention is to have it friendly." But he added that
"We have been trying to do this for nine months and they have
said no."
Representatives from Read-Rite (corrects company name) were
not immediately available for comment. |
