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Technology Stocks : WDC/Sandisk Corporation
WDC 152.20-3.7%3:59 PM EST
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To: SiliconAlley who wrote (60241)5/12/2016 11:45:41 AM
From: Art Bechhoefer2 Recommendations

Recommended By
david1951
FJB

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CFIUS can exert influence only when foreign ownership approaches 50%. No domestic or international laws or rules can interfere with anyone taking a position of only 15%. There are restrictions on percentage ownership by mutual funds traded in the U.S., but those restrictions are designed to keep mutual funds from becoming overweight in a single security.

Political influence often interferes with a proposed merger. In 2005, the Chinese overseas oil company CNOOC made an offer to buy Unocal, which created some really stupid statements from the office of U.S. Senator Schumer of New York. He said he didn't want a Chinese company operating all those Union Oil 76 truck stops, when in fact Unocal didn't own ANY Union 76 stations. Nevertheless, CNOOC withdrew its offer, and Unocal ended up getting sold to Chevron at a lower price than the CNOOC offer. I filed an action in a California court against the Chevron proposed purchase. An oil engineer from Unocal also filed an action. A California judge, in response to our claims that Unocal was being sold at a small fraction of the value of its proved oil reserves, denied our claims on the grounds that the price of Unocal stock was higher after Chevron made its offer!!!

The lesson here, if there is one, is that politics frequently interferes with merger activity. The case of SNDK and WDC is not different in this respect.

Art
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