The 2000 20-billion dollar deal looked like a great deal for Seagate then hurt the long term viability of the company by divesting interests in companies that Seagate had stake on? YOU BE THE JUDGE.
"I think the value the shareholders are getting is pretty spectacular" -Steve Luczo
There were tradeoffs, one one them is giving up interest in SanDisk. I don't think the SMT saw SanDisk as part of a long term strategic vision then.
Seagate to go private in $20 billion deal
Seagate Technology wants to go private.
Sergio G.Non
By Sergio G.Non | March 30, 2000 -- 08:30 GMT (00:30 PST) | Topic: Tech Industry
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Under the terms of a $20 billion agreement unveiled after market close Thursday, the storage technology company would sell its 33 percent stake of Veritas Software back to Veritas while a private investment group led by Silver Lake Partners would buy Seagate's operations for cash.
The parties valued the deal at $20 billion, or roughly $77.50 per Seagate share, a 26 percent premium to Seagate's average price over the last 30 days.
That calculation includes $5 from the Silver Lake group and 0.467 Veritas shares, worth about $72.50 for every Seagate share, as of Wednesday's close. It also assumes Veritas will keep about $500 million cash, although it has the right to up to $750 million in retained cash.
Thursday's deal requires Silver Lake's group to pay about $2 billion cash for Seagate's core operations.
Veritas will issue a total of about 116 million shares to recover 128 million shares from Seagate as well as the aforementioned cash and Seagate's holdings of Gadzoox Networks, SanDisk, CVC and Dragon Systems, which was acquired by Lernout GS Capital, a Goldman Sachs unit; August Capital; Texas Pacific Group; Integral Capital; and Chase Capital Partners.
After stagnating for much of last year, shares of Seagate have risen recently along with disk drive stocks in general. The stock rose as high as 74 in after-hours activity. It closed Wednesday's regular trading at 62 15/16."
http://www.zdnet.com/article/seagate-to-go-private-in-20-billion-deal/