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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (6657)	8/18/1999 10:07:00 AM
From: Sam	Respond to of 60323

Craig, Well, maybe I was wrong. Does anyone actually understand this paragraph in the press release of this morning: <<Concurrently with the offering, Seagate Technology will enter into a prepaid forward contract with the SanDisk PEPS Trust in connection with a public offering of an aggregate of $200 million of Premium Exchangeable Participating Shares, or PEPS, of the Trust. The SanDisk PEPS Trust will offer the underwriters an option to purchase an additional $30 million of PEPS to cover any over-allotments in connection with the PEPS offering. The PEPS offering is being managed by Morgan Stanley Dean Witter. In addition, Thomas F. Mulvaney, senior vice president, general counsel and secretary of Seagate Technology, resigned from SanDisk's board of directors on Aug. 13, 1999. >> It appears to mean that Seagate is selling most of its Sandisk stake, but in a PEP trust, rather than straight shares. It isn't clear what percentage of the stake is involved, but probably enough to take it under 5% so that they don't have to file every time they want to sell some.

To: Sam who wrote (6657)	8/18/1999 10:33:00 AM
From: Rich Miani	Respond to of 60323

can anyone explain the PEPS item mentioned in the release ? What is it , how does it work, and why ?

To: Sam who wrote (6657)	8/18/1999 1:32:00 PM
From: Craig Freeman	Read Replies (1) \| Respond to of 60323

Sam, I can't put my finger on the PEPS offering but on its face it looks like SEG will eventually sell a total of 2,250,000 of their ~6M shares. That still leaves them with >10% ownership and the following agreement appears to remain active (see the 3/13/97 10-K at freeedgar.com) Interesting eh? Craig Seagate Relationship The Company also has a strategic relationship with Seagate, which owns approximately 25% of the Company's Common Stock. In January 1993, Seagate acquired a 25% ownership interest, calculated on a fully diluted basis, in the Company and entered into a joint cooperation agreement that provides for a strategic alliance between the parties. Seagate has the option to market the Company's products commencing in January 1999 and at that time may be established as a distributor for the Company's products. If the option is exercised, the Company and Seagate will coordinate their efforts so that up to one-third of the Company's worldwide net revenues from all flash products could be generated from sales of the Company's flash products through Seagate. The joint cooperation agreement also provides that each party will have the exclusive right to market to certain customers. The joint cooperation agreement will terminate if, among other things, Seagate's ownership interest in the Company falls below 10% or, on or after January 15, 2000, upon at least one year's advance written notice by the Company to Seagate. Seagate has the right to nominate one director to the Company's Board of Directors. Alan F. Shugart, Seagate's Chairman, President and Chief Executive Officer, serves as Seagate's nominee to the Company's Board of Directors. See "Item 13: Certain Relationships and Related Transactions."