Hynix nixes Micron deal

The board of directors of Hynix Semiconductor have decided that that the sale of its memory operation to Micron Technology is not the best option for the company.

The board of directors of Hynix Semiconductor have decided that that the sale of its memory operation to Micron Technology is not the best option for the company, its shareholders, or its employees and creditors.

In an original proposal, made in mid-April, Micron Technology was to have purchased Hynix’s memory business in exchange for approximately 108.6 million shares of Micron common stock. Micron would have also invested $200 million in Hynix in return for a 15% equity stake in Hynix’s continuing non-memory businesses.

However, the Hynix board has now said that, having reviewed the original memorandum of understanding signed with Micron, it believed that the viability of the remaining company would be more uncertain under the proposed restructuring plan than it would be if the company remained an independent entity.

In a statement, the Hynix board added that: ‘The (original) plan overestimates the value of the Micron stock to be paid for the sale of Hynix’s memory business, unrealistically presumes the size and timing of contingent liabilities, and is too optimistic in its estimate of the cash flow of the remaining company.