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Elpida bondholders want more cash

Big demands even when the chips are down
Tue Aug 14 2012, 12:47

BONDHOLDERS of bankrupt Japanese memory maker Elpida told a court that Micron's offer for the firm was too low.

Elpida, which owes billions in bonds, went to the wall earlier this year and Micron came in with an offer to buy the firm. Now Elpida's bondholders have gone to a Tokyo court, saying they believe the firm is worth JPY 300bn, not the JPY 200bn Micron has offered.

Elpida's bondholders have stomped their feet before over the price Micron is willing to pay for the company. The bondholder's problem is that there are few other options with the DRAM market still considerably worse off than it was a few years ago.

Micro CEO Mark Durcan told Bloomberg's Businessweek, "The reality of the situation is that it's a pretty difficult memory market and this is the best offer from a rigorous process. We think it's very fair to Elpida shareholders."

The bondholders want investors other than Micron and will ask the court to present their plan to resurrect the company, which if granted, could happen in October.

Micron views Elpida as a chance for it to finally compete with Samsung and Hynix in the DRAM market. While Elpida's bondholders might want more cash, it is hard to see other DRAM makers stepping in, with Samsung and Hynix unlikely to want to stir up the hornets' nest of regulators should either firm show interest in boosting its market share by buying Elpida.

Both Elpida and Micron have previously said the sale is expected to complete in the first half of 2013. µ


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