Thursday, November 1, 2012
Elpida Says Court Approves Acquisition By Micron
Thu., November 1, 2012
Micron Technology's plan to acquire Japanese memory chipmaker Elpida took a big step toward completion after a Tokyo court approved the agreement and dismissed a rival plan promoted by a group of bondholders, Reuters reported. A district court in Tokyo said on Wednesday it was referring bankrupt Elpida's plan to be bought by U.S. chipmaker Micron to creditors for approval, according to a news release on Elpida's website. The court said it dismissed a rival proposal by a group of bondholders, led by hedge funds Linden Advisors, Owl Creek Asset Management and Taconic Capital Advisors, who have said the $2.5-billion price tag grossly undervalues Elpida, arguing that the company is worth 300 billion yen ($3.78 billion). Elpida, the last of Japan's dynamic random access memory (DRAM) chipmakers, was driven into bankruptcy by falling chip sales and foreign competition. Boise, Idaho-based Micron, which is losing money due to a crumbling PC industry, wants to create larger economies of scale and offered in early July to buy Elpida for about $750 million in cash and to pay creditors a total of $1.75 billion in annual installments through 2019. The deal would catapult Micron into the No. 2 spot in the global market for DRAM chips, behind Samsung Electronics. Last week, a U.S. judge overseeing Elpida's parallel U.S. case said the company was taking a risk by not keeping creditors better informed. That U.S. judge would eventually have to approve the transfer of U.S. assets.