Hynix, Micron Narrow Price Gap; Seek $4 Billion Deal - Yonhap
DOW JONES NEWSWIRES
SEOUL -- Hynix Semiconductor Inc. (Q.HYY) and Micron Technology Inc. (MU) have narrowed their pricing differences over the sale of Hynix's assets to Micron, and are closer to striking a deal, Yonhap News Agency reported Friday.
An official at Korea Exchange Bank (Q.KEB), a key Hynix creditor, said the two sides have yet to narrow some key differences and the talks would likely drag on.
Hynix is in talks to sell some of its key assets to its U.S. competitor Micron. Germany's Infineon Technologies AG (IFX) has also expressed interest in forming an alliance with Hynix.
Yonhap quoted a member of the creditor-led restructuring committee for Hynix as saying Infineon could present a preliminary bid, possibly over the weekend. Hynix likely will seek to come up with a deal next week, it said.
The report said Micron and Hynix's valuations are only about $200 million apart and the two sides will likely settle on a figure around $4 billion.
Instead of price, the key issues in the negotiations now center around Hynix's labor and debt, the report said.
Sources from creditor bank have previously said Micron has offered to buy Hynix's entire memory chip operations and a minority stake in the company's non-memory operations.
Micron wants to pay with both cash and its shares, they said.
The two sides are now discussing the timeframe on which to base Micron's share price for the acquisition, the report said.
Micron's shares have risen recently, and were up 11% since Jan. 29 to Thursday's close of $33.86.
Creditors are banking that Micron's shares will rise after it strikes a deal with Hynix and thus are seeking to obtain Micron shares below current market prices, the report said.
If a deal is struck, proceeds from Hynix's asset sale will be distributed to creditors based on their debt exposures and contribution in previous bailouts for Hynix, the report said.
Hynix creditors - many of them government-owned banks - have pumped in billions of dollars into the company in two bailouts involving more loans, debt rollover and swapping some debt into equity.
Shares of Hynix ended Friday up 8.12% at 2,530 won ($1=KRW1,318).
-By Suh Hae-sung, Dow Jones Newswires; 822-732-2165; hae-sung.suh@dowjones.com
(This story was originally published by Dow Jones Newswires)
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Updated February 8, 2002 3:51 a.m. EST
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