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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (39595)	10/3/1998 12:18:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

carl, here is some info from micron's home page... micron.com mu says what people want to hear. they can go toe to toe with clinton in the bs dept. however, they are smarter. they have attorneys that help them manipulate news and not spout fraudulent stuff. ok, they do spout fraudulent stuff but there is no legal accountability b/c they state it as an opinion ;-)

To: Carl R. who wrote (39595)	10/3/1998 6:31:00 AM
From: Kathleen capps	Read Replies (1) \| Respond to of 53903

From the last 10Q: On June 18, 1998, the Company entered into an acquisition agreement with Texas Instruments Incorporated ("TI"), to purchase substantially all of TI's memory operations through the issuance of debt and equity securities. The agreement has been approved by the Boards of Directors of the Company and TI and the closing is subject to several conditions and approvals, including satisfactory completion of due diligence and completion of appropriate agreements with various third parties. Under the terms of the agreement, upon closing TI will receive approximately 28.9 million shares of MTI common stock, $740 million principal amount of seven-year, 6.5% notes convertible into an additional approximately 12.3 million shares of MTI common stock, and a $210 million principal amount, seven year, 6.5% subordinated note. The Company will also assume upon closing approximately $190 million of debt associated with TI's Italian memory operations. In addition to TI's memory assets, at the closing the Company will receive $750 million in cash. Under the terms of the agreement, at closing TI and the Company will enter into a ten year royalty-free patent cross license, that commences on January 1, 1999. The parties have also agreed to make cash adjustments to ensure that the working capital of the acquired operations is $150 million (subject to reduction in certain circumstances) at closing. And from the SEC 424B2 on 15 july: The Company has entered into an acquisition agreement with Texas Instruments Incorporated ("TI") to purchase substantially all of TI's memory operations and assume certain related liabilities, but this transaction has not yet been consummated. The transaction is subject to several conditions, including satisfactory completion of due diligence and completion of appropriate agreements with various third parties. In particular, the Company and TI need to obtain the consent of the Italian government as well as each of the partners and bank syndicates to TECH Semiconductor Singapore Pte. Ltd. ("TECH") and KTI Semiconductor ("KTI"). The transaction is subject to customary regulatory approvals (including Hart-Scott-Rodino and European antitrust reviews). There can be no assurance that the conditions required to effect the transition will be met and that the transaction will ever be consummated. The integration and successful operation of the pending business to be acquired is dependent upon a number of factors, including, but not limited to: the Company's ability to transfer its product and process technology into the acquired facilities in a timely and cost-effective manner; the availability of sufficient funds to upgrade certain equipment at the facilities, particularly should the actual cost exceed the Company's current estimate; the ability of TECH and KTI to restructure each of their existing financing arrangements and secure adequate additional financing to provide equipped facilities capable of utilizing Micron's manufacturing processes; the Company's receipt of adequate assistance, service and support from TI during the transition period following consummation of the transaction; the Company's ability to effectively manage global semiconductor manufacturing operations and distribution channels and expand its sales and marketing programs; the Company's ability to retain key employees of the acquired operations; the Company's success in transitioning the key business relationships from TI's memory operations to the Company; the Company's ability to implement and/or integrate information systems capable of handling the expanded operations, including year 2000 compliance; and the Company's ability to successfully integrate differing management structures, all of which require significant management time and resources. In addition, the long-term successful operation of the pending business to be acquired is dependent upon the market for the Company's semiconductor memory products and the Company's long-term ability to reduce manufacturing costs at a rate commensurate with the decline in average selling prices for such products. If consummated, it is expected that the pending acquisition will substantially increase the Company's share of the worldwide DRAM market, and as a result the Company would become even more sensitive to fluctuations in pricing for semiconductor memory products. Many customers prefer multiple sources of supply for semiconductor memory products, therefore the Company may not retain all of TI's semiconductor memory market as some of TI's customers are currently customers of the Company. It may become difficult to increase the Company's customer base to a level required to sell the expected increase in production of semiconductor memory products as a result of the transfer of its product and process technology into the TI semiconductor memory production facilities. If the Company is successful in the transfer of its product and process technology into the acquired production facilities the amount of worldwide semiconductor memory capacity could increase, resulting in further downward pricing pressure on the Company's semiconductor memory products. The pending acquisition is expected to have a significant effect on the Company's future results of operations and cash flows, including, but not limited to: a considerable negative impact on gross margin in the near term due in part to significantly higher per unit manufacturing costs at the acquired facilities; costs related to the assimilation of the acquired operations; increased interest expense associated with the $740 million principal amount of convertible subordinated notes ("Convertible Notes") and $210 million principal amount of subordinated notes ("Subordinated Notes") to be issued in connection with the TI acquisition and the Italian debt to be assumed in the transaction; an increase in capital spending relating to the newly acquired facilities; and the potential for further downward pressure on the average selling prices the Company receives on its semiconductor memory products. The Company will account for the pending acquisition as a purchase, which could result in a write-off related to in-process research and development at the time of closing of the acquisition and the creation of intangible assets that could result in significant future amortization expense. Check out the SEC documents pertaining to the Rendition Sale -- it covers the terms of the TI deal as a risk factor. An interesting paragraph from that Aug Doc: Micron anticipates that it will spend approximately $900 million in fiscal 1998 for purchases of equipment and construction and improvement of buildings at Micron's existing facilities. However, in the event current market conditions continue, Micron does not expect to have sufficient internal sources of liquidity to effect its current operational plan and will need to secure additional financing from external sources. Micron has a $500 million revolving credit agreement, which is available to finance its semiconductor operations. However, the agreement contains certain restrictive covenants, including a minimum fixed charge coverage ratio and a maximum operating losses covenant. On June 16, 1998, Micron amended the agreement to collateralize the facility with certain accounts receivable, inventory and equipment at its Boise facility and modify the maximum operating loss covenant for the third quarter of fiscal 1998. There can be no assurance that Micron will be able to meet the terms of the covenants and conditions in the agreement, borrow under the agreement, renegotiate a satisfactory new agreement, or replace the existing agreement with a satisfactory replacement, in which event Micron may not have access to the credit facility. Cash generated by, and credit lines available to, MEI are not anticipated to be available to finance other MTI operations. Micron is currently evaluating a number of financing alternatives. There can be no assurance that external sources of liquidity will be available to fund Micron's ongoing operations or Micron's capacity enhancement program. The failure to obtain financing would hinder Micron's ability to make continued investments in its capacity enhancement program, which could materially adversely affect Micron's business and results of operations. See sec.gov