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Technology Stocks : WDC/Sandisk Corporation

WDC 163.00

-0.4%

Nov 7 9:30 AM EST

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To: Sam who wrote (59993)	3/14/2016 6:03:03 PM
From: Sam	Read Replies (1) of 60323

Western Digital sells off after Jefferies cuts target on SanDisk fears; Citi defends Mar 14 2016, 16:52 ET \| About: Western Digital Corporation (WDC) \| By: Eric Jhonsa, SA News Editor Western Digital ( WDC -3.4%) had a rough day after Jefferies' James Kisner cut his target by $12 to $65, while arguing the pending SanDisk ( SNDK -0.6%) acquisition and NAND flash market weakness (relevant to SanDisk's core businesses) will act as overhangs. Citi's Stanley Kovler downgraded SanDisk to Neutral due to the small arb spread that now exists relative to Western's buyout price, but also talked up the deal's potential and predicted shareholders will approve. He now expects $525M/year in synergies being achieved in the months following the deal's closing, and $1.145B/year by 2020. $750M of the 2020 synergies are expected to come from Western's ability to vertically integrate NAND flash via SanDisk, and $375M are expected to come from higher client SSD sales by Western to OEMs. $205M in "dis-synergies" are forecast related to customers choosing to limit the combined firm's market share. The notes come as Western begins marketing $18B worth of debt it's looking to raise to help pay for the SanDisk. The debt consists of $8.1B worth of bridge loans, $9B of term loans, and a $1B revolving credit line. Moody's has granted Western's debt a Ba1 (non-investment grade speculative) rating. Following a Tsinghua Unigroup subsidiary's decision to cancel a planned $3.8B investment in Western, SanDisk shareholders are due to receive $67.50 in cash and 0.2387 Western shares for each share they own. seekingalpha.com

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