Seagate ends talks with private equity
Credit: Reuters (www.reuters.com)
SANTA ANA, California
(Reuters) - Seagate Technology PLC has terminated discussions about a private equity-led buyout and instead has won board approval to buy back $2 billion of its own shares.
The company said on Monday it halted talks because "the indications of the valuation range were not in the best interest of the company and its shareholders". Its shares, briefly halted after the close, slid 5.5 percent after-hours.
Seagate said in October it had received preliminary interest about a buyout, which sources told Reuters was led by TPG Capital. But enthusiasm waned in past weeks with potential partners such as KKR and Bain Capital discouraged by tough financing, among other reasons.
The company has not identified which parties it had held talks with.
"Our dialogues with them were extensive and thoughtful," said CEO Steve Luczo. "However, management and the Board have chosen to cease discussions concerning a private equity-led leveraged buyout."
The No. 1 hard-drive manufacturer by revenue also forecast revenue for the December quarter of $2.7 billion, in line with expectations. It projected a gross margin of at least 19.5 percent in the period, versus expectations for 19.12 percent, according to Thomson Reuters I/B/E/S.
Seagate's stock fell to $13.10 in extended trading, after closing at $13.86.
(Reporting by Alex Dobuzinskis; editing by Gunna Dickson)
Credit: Reuters (www.reuters.com)
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