No Buy Out for Seagate

Seagate Technology ends going-private talks

Monday, Nov 29, 2010  |  Updated 6:00 PM PDT
View Comments (
)
|
Email
|
Print
No Buy Out for Seagate

Seagate Techonology

advertisement

 Seagate Technology PLC said Monday it terminated discussions with private equity firms about taking the disk drive maker private in a leveraged buyout because it felt the purchase price being offered was too low.

Shares fell 75 cents, or 5.4 percent, to $13.11 in aftermarket trading, having closed earlier down 3 cents at $13.86.

The Scotts Valley-based company said it instead has authorized the repurchase of $2 billion in shares in an effort to return value to shareholders. Stock buybacks lower a company's shares outstanding, raising earnings per share and expanding the percentage size of shareholders' stakes.

"We appreciate the interest shown by the private equity firms and our dialogues with them were extensive and thoughtful," Seagate Chairman and CEO Steve Luczo said in a statement. "However, management and the board have chosen to cease discussions concerning a private equity-led leveraged buyout. Given the strong debt markets, improving business conditions and other financing options, Seagate has initiated a plan to further optimize its capital structure to maximize shareholder returns."

Seagate said it is seeing improved demand for hard disk drives and expects to report revenue of at least $2.7 billion for its fiscal 2011 second quarter, which ends in December. The forecast is in line with analyst estimates, according to Thomson Reuters.

Seagate said it will fund the share repurchase through a combination of cash on hand, future cash flow from operations and potential alternative sources of financing.
     
 

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
Bay Area Proud
Bay Area Proud is NBC Bay... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out