Hynix Wants Time To Weigh Infineon, Micron Bids
DOW JONES NEWSWIRES
SEOUL -- Hynix Semiconductor Inc. (Q.HYY) won't rush to sign a deal with Micron Technology Inc. (MU) until it fully reviews a proposal from Infineon Technologies AG (IFX), a source close to Hynix's restructuring process told Dow Jones Newswires Thursday.
"It's obvious that the seller wants to take things slower if there is more than one buyer," said the source who declined to be named.
Hynix doesn't want to ruin the chance of a potential alliance with Infineon by closing a deal with Micron early, he said.
Hynix and Micron have been in talks since early December. Infineon recently jumped into the fray and sent a negotiation team to Seoul Wednesday for a due diligence.
"Hynix will give an equal chance to Infineon to evaluate its assets," he said, but added that the German chipmaker is in "disadvantageous" position since Hynix and Micron have made progress during their two-month-long talks.
"Infineon has a lot of catching up to do," he said, but didn't dismiss the possibility of the German chipmaker producing a formal bid for Hynix by the end of this week.
"Infineon has been considering a bid for Hynix for quite a while so there is a chance that it will present a preliminary bid during the team's stay in Seoul," the source said.
He, however, declined to comment on details of a potential proposal from Infineon.
He also declined to say if Micron was demanding fresh funding and a debt writeoff from creditors as a condition for its acquisition of Hynix's assets.
The Chosun Ilbo reported that Micron has asked creditors to provide new loans of 1.5 trillion won ($1=KRW1,321), while offering to pay about $4 billion for Hynix's memory operations.
"The proposed figure of $3 billion or $4 billion is not a big deal," he said, adding that a higher figure would mean a bigger burden on creditors. "It's all part of the equation."
Hynix Chief Executive Park Chong-sup is currently in the U.S. with Boise, Idaho-based Micron for further negotiations, but recent developments suggest he is unlikely to reach a deal during his stay.
Hynix's alliance prospects widened recently after Infineon expressed interest in a tie-up with the Korean chipmaker. Rising chip prices and quicker-than-expected chip market recovery have also raised Hynix's options.
Top government officials have lately expressed opposition to selling Hynix too cheaply, even suggesting the chipmaker could continue as an independent concern if the price isn't right.
Creditors will own nearly half of Hynix after they complete a KRW3 trillion debt-for-equity swap in March as a part of bailout agreed to in November.
Also as a part of a multibillion-dollar bailout, creditors agreed to provide new loans of KRW660 billion, write off about KRW1.4 trillion in existing debt and roll over the remaining debt.
The conversion of debt into equity and a write-off would lower Hynix's debt to KRW5 trillion from KRW8.64 trillion. Hynix also has foreign debt of $1.14 billion that was excluded from the bailout.
At 0400 GMT (11:00 p.m. EST Wednesday), shares of Hynix were 1.4% lower at KRW2,450.
-By Suh Hae-sung, Dow Jones Newswires; 822-732-2165; hae-sung.suh@dowjones.com
Updated February 6, 2002 11:38 p.m. EST
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