Seagate turned down a bid of $7.5bn when it was shopping itself around private equity buyers last year, it has emerged.
This is according to Bloomberg, which wrote about the deal on Saturday. Apparently Seagate was offered $7.5bn by TGP Capital. It is currently capitalised at $6.82bn and was in that rough area in November last year. But this wasn't enough – and Seagate chairman and CEO Steve Luczo said he and the board thought shareholders would get more value if Seagate carried on as a public company.
He said bidders wouldn't raise their bids because they were worried about the short-term economic outlook.
Bloomberg repeated its claim that Western Digital made a bid for Seagate at the time, a bid that was also rejected.
If WD had succeeded, then the result would have been a market-dominating HDD behemoth with the ability to achieve economies of scale far, far beyond its two HDD competitors, Toshiba and Samsung. Game over in fact, as they wouldn't have had a hope in hell of catching up with "WDgate" or whatever it would have been called.
Now Luczo and the other Seagate execs have to prove the private equity buyers and WD wrong by raising the value of the company way past the $7.5bn point.
If he is right about the lead Seagate has in areal density improvements, and is correct about flash tablets and smart phones driving an increased need for HDD storage, and, crucially, if he can get Seagate product to market faster and better-positioned than the competition, then Luczo could do it and regain the unit ship lead in HDD manufacturing.
Then he could appoint a new CEO and retire again... ®