Activists win push to study group split in Western Digital stock

Activists win push to study group split in Western Digital stock ...

Updated at 9:40 am EST

Get Western Digital Corporation Reportshares jumped higher Wednesday after the chipmaker announced it would begin a review of its strategic options following a fresh push by activist investors for the sale of its flash memory business.

Elliott Management, which claims a 6% share in the company, received another $1 billion in financing last month, primarily to assist fund a spin-off, sale, or merger with a strategic partner of the flash memory unit, which it claims to be worth $17 billion to $20 billion.

Western Digital said the company''s board of directors is "aligned" in the belief that optimizing value creation requires a comprehensive assessment of strategic options based on structural options for the company''s Flash and HDD businesses.

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Through this process, we are constantly engaging in a wide range of strategic and financial solutions that will help further enhance Western Digital''s value, including Elliotts'' offer to invest incremental equity in our Flash Business," said CEO David Goeckeler. "We look forward to continuing our constructive dialogue with Elliott as this process progresses.

WDC shares were marked 1.6 percent higher in early Wednesday trading to drop their hands at $61.08 each, a move that would cut the stock''s year-to-date decrease to about 7 percent.

Western Digital, based in San Jose, is making flash memory chips in Japan as part of a business agreement with Kioxia, which was sold by Toshiba Corp. to a private equity consortium led by Bain Capital in 2018, is one of the world''s largest NAND chipmakers in the world and a key supplier to Apple Inc.''s (AAPL) - Get Apple Inc. ReportiPhones.

Western Digital, which tried to buy Kioxia four years ago, purchased SanDisk Corp. in 2016, but was exposed to activist pressure at the time for the $17 billion agreement, which, according to some, was negotiated at too high prices.

South Korea''s Samsung Electronics and SK Hynix have purchased Intel Corp.''s (INTC) for around $9 billion.

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