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Technology Stocks : WDC/Sandisk Corporation
WDC 157.75+0.4%Nov 14 3:59 PM EST
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To: nealh24 who wrote (15490)10/11/2000 3:53:14 PM
From: Art Bechhoefer  Read Replies (2) of 60323
 
Neal, the agreement between SanDisk and Tower calls for SanDisk to buy newly issued shares in Tower, equal to 10 percent of the company. I believe that's accurate, but I'd have to go back to the recent announcement of the deal to make sure. The agreement is contingent upon the Israeli government providing $300 million assistance for building the new factory. That part has just come through, so it looks like all systems are go. Also, the agreement between SanDisk and Tower was made at a time when Tower stock was selling around 23. But the agreement also provided that if the stock price should drop, SanDisk would pay the going price. Thus, the SNDK investment costs less than was initially anticipated, an even better deal for SanDisk. That 10% share of TSEM gives SNDK an opportunity to profit from the growing market for embedded flash memory, a market slightly different from that for removable flash cards.

Art
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