Comment Seagate has ended discussions with interested parties about going private.
The discussions failed to agree on how much the firm was worth with the private equity buyer – understood to be TGP Capital – placing a lower value on Seagate shares than Seagate's board.
But the world's largest hard drive maker did have some good news to go with the announcement.
It is spending $2bn on buying back its own shares - which should help bolster their price, and therefore please shareholders. It also said channel inventory was looking good, with 170m units sold. It expects sales of $2.7bn for the quarter ending 30 December and gross margins of 19.5 per cent.
Why did Seagate's board want a private equity buyout option? Was it just to get some cash for shareholders and then, when the firm went public again, make a killing for the private equity backers and those shareholders who had kept their shares?
Or was there serious company restructuring and refocusing to accomplish? In that case whatever needs to be done still needs to be done.
Perhaps Seagate would be better off having a full-time chief executive officer working on the problem rather than the existing combined chairman and CEO. ®