Boise (ID) – Over continued objections from major shareholders of both companies, including Micron shareholder and billionaire investor Carl Icahn, the boards of directors of both semiconductor manufacturer Micron Technology and flash memory manufacturer Lexar Media have voted to accept an amended merger offer, which financial analysts are saying raises the value of the merger deal to $945 million.
But in advance of today’s merger votes, Icahn reportedly increased his stake in Micron from 5.97 percent to 7.47 percent, thus increasing his voting stake among shareholders as well. A shareholder vote on the merger is still forthcoming, and many funds managers with stakes in both companies continue to oppose the deal. Some believe instead a Lexar merger with flash memory competitor SanDisk might create an entity with a stronger market position.
Today’s amendment proved to be a drop in the bucket that quickly evaporated, which may be good news for opponents of the deal. Essentially, Micron agreed to raise its exchange rate for Lexar shareholders from .5625 shares of Micron for every Lexar share, to .5925 shares. With 82.69 million shares of Lexar stock outstanding, Micron is effectively buying $777.3 million of stock for $790.7 million of its own stock. But this $13.5 million bonus was more than eradicated in one day’s trading today, as comments today from new Federal Reserve chairman Ben Bernanke – proving he still lacks the deft touch for euphemism of his predecessor, Alan Greenspan – sent stocks plunging almost 200 points on the Dow. Lexar lost about $18.2 million dollars in outstanding stock value just today, thanks to not-so-gentle Ben.