After grabbing headlines a week ago, the Chinese thunis group of America’s leading memory chipmaker micron technology (Nasdaq: MU) potential acquisition of mystery, a source says meguiar’s worried about the U.S. government may be rejecting the deal on national security grounds. The author of this result is a bit surprised, because according to the forecast, although the deal will be controversial, but will eventually get the committee on foreign investment in the United States (CFIUS) – responsible for the review of national security risk agency, approval.
Probably micron does not want to continue to negotiate, because the deal might be perceived as a Washington voted down. Having said that, but as long as a purple light group is higher than the previous $21 per share offer, meguiar’s is likely to rapidly restore the negotiations, and all this is just a negotiation strategy.
Of coverage of the big trade began a week ago, according to media reports at that time, is closely related with the Chinese government’s purple light group is preparing for a price of $21 per share bid for chipmaker micron, the value of a deal for $23 billion. (above) some people think that, because the light is America’s leading beauty memory chip maker, has a large number of high-tech professional knowledge, the transaction will be rejected. But there are also people said, meguiar’s technology is widely used around the world, thus rejected the possibility of a smaller.
The latest reports, meguiar’s has privately told that purple light, the probability of a larger veto by CFIUS, meguiar’s don’t want to contribute to trading. (English), according to reports in the violet light group officials last week after formal bid intention, meguiar throws its views. Although the company, the report added meguiar was consulted a bank, but did not hire investment Banks, because the company is still don’t want to make deal.
Reporter basing on past experiences, almost can say with full confidence, a special message from micron, so almost certainly, the leak of the message is a strategic decision, meguiar’s beautiful light is designed the baby for the nurse’s sake. This may mean that the light just want to tell purple light, the offer price of $21 is too low, purple light raise quotation is needed to make the light through, there is a huge veto to contribute to the risk of agreement.
Hard to convince investors
Investors views are different obviously, meguiar’s share price fell 6%, the latest trading to $18.89, less than 10% plan to purchase price. After media disclosed for the first time the news last week, its shares rose to $20.12. At the same time, it is worth mentioning, because the computer’s memory is the most important components of the electronic equipment, facing the intense market competition, meguiar’s share price over the past 7 months has lost about half the market capitalisation.
Meguiar’s rebuff purple light invitation show that they have kicked the ball to the purple light, the Chinese company will have to decide whether to raise price to return to the talks – or will reach $30 a share. This would mean that violet light of meguiar’s price will sharply increase to more than $30 billion, for such a deal would probably not get approval.
If this is a kind of market-driven rational situation, the author think the purple light will give up the offer, the story will end there. However, the author is convinced that there are political forces involved, because purple light group by the central government’s support. As the memory chip, the largest buyer of Chinese desire all-powerful chip market around the world. Therefore, the author predicts that purple light to return to negotiations in about one to two weeks and put forward a higher bid, the two sides will return to the negotiating table.