Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (99231)	12/21/2005 8:53:08 AM
From: IHUBDOWN	Respond to of 99280

Zeev, You see where Seagate (STX) is acquiring MAXTOR Not much volatility in STX stock yet, but big volume... Wish I knew what mr. mkt. will think of this.... Seems acretive to STX to me... Seagate to buy Maxtor for $1.9 bln in stock Wed Dec 21, 2005 07:49 AM ET (Adds premarket share prices) NEW YORK, Dec 21 (Reuters) - Seagate Technology (STX.N: Quote, Profile, Research) on Wednesday said it would buy rival computer disk-drive maker Maxtor Corp. (MXO.N: Quote, Profile, Research) for $1.9 billion in stock, aiming to cut combined costs and drive development of new products. In the deal, expected to be completed in the second half of 2006, Maxtor shareholders will receive 0.37 shares of Seagate common stock for each Maxtor share they own. At current prices, the transaction is worth about $7.25 a share for Maxtor investors, a premium of more than 60 percent to its closing price on Tuesday. Maxtor's stock has not traded in that range since June 2004. Maxtor shares rose 52 percent in premarket trade, according to Inet. Seagate shareholders will own about 84 percent and Maxtor shareholders about 16 percent of the new combined company. The combination is expected to add 10 to 20 percent to Seagate's cash earnings per share after the first full year of joint operations, Seagate said in a release. It also expects to hit $300 million of annual operating expense savings after the first full year of the combination. Seagate said its executive management team will continue to serve in their current roles and the combined company will retain the Seagate name. The deal comes as Maxtor, whose biggest customer is No. 1 personal computer maker Dell Inc. (DELL.O: Quote, Profile, Research) , has been restructuring and battling increasingly stiff competition. Analysts have said Maxtor has been losing market share to competitors like Seagate and Western Digital Corp. (WDC.N: Quote, Profile, Research) in consumer electronics, one of the fastest-growing businesses for computer storage companies. "With the increased scale of the combined company, we can reduce overall product costs and provide more innovative products at more competitive prices," Bill Watkins, Seagate's chief executive, said in a statement. Seagate also backed its earlier outlook for its second fiscal quarter of $2.2 billion in revenue and earnings per share in the range of 53 cents to 57 cents. Seagate shares were not trading premarket, according to Inet. Maxtor shares rose $2.36 to $6.88.