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Elpida Bond Holders Expected to Vote Against Micron Purchase

By - Source: Reuters | B 7 comments

Micron has not cleared all hurdles in the acquisition of Elpida yet.

A group of bond holders will reportedly vote against the acquisition and claim that, at $750 million, Elpida has been undervalued. In a rather unusual move, the members of the group, which are unknown at this point, said that they would present a counter offer.

The acquisition process could hit a roadblock because of the move, but it is unclear whether the bond holders have enough voting power to halt the deal. However, a report published by Reuters also noted that the group is considering to pursue alliances with other Elpida creditors and ditch Micron as the prospective buyer.

Under the current proposal, Micron agreed to pay $60 billion yen, about $750 million, for Elpida's assets, and cover 140 billion yen, about $1.76 billion, in debt in annual installments until 2019. An additional $334 million will go toward a 24 percent stake in Rexchip Electronics. Back in February, Elpida filed for bankruptcy with a total debt of 448 billion yen - about $5.6 billion.

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  • -6 Hide
    victorintelr , July 11, 2012 1:44 PM
    Are those guys even aware that Elpida has debts that need to eventually be paid?
  • 8 Hide
    willard , July 11, 2012 2:05 PM
    victorintelrAre those guys even aware that Elpida has debts that need to eventually be paid?

    The bond holders are the people Elpida owes money to. Of course they're aware.
  • 3 Hide
    eddieroolz , July 11, 2012 2:23 PM
    I agree that 750million is way too undervalued. It's almost an insult to the high-quality DRAM chips that Elpida produces.
  • Display all 7 comments.
  • 1 Hide
    hannibal , July 11, 2012 8:34 PM
    So they can wait and lose even more... Nice...

  • 1 Hide
    anti-painkilla , July 11, 2012 9:29 PM
    They are paying a total of USD3.1B (200B Yen) for the company. The 750m is for the assets, the rest is to cover the debt.
  • 3 Hide
    sykozis , July 11, 2012 10:22 PM
    eddieroolzI agree that 750million is way too undervalued. It's almost an insult to the high-quality DRAM chips that Elpida produces.

    After filing bankruptcy....Elpida is essentially worthless. Most suppliers don't want to deal with a company that filed bankruptcy out of fear that it might happen again. They can either take Micron's offer....or hope the company can survive long enough for a better offer to come along.
  • 0 Hide
    hetneo , July 13, 2012 10:44 AM
    eddieroolzI agree that 750million is way too undervalued. It's almost an insult to the high-quality DRAM chips that Elpida produces.

    Taking over debt obligation must be included, so they are actually paying $2.51 billion for it.