Western Digital could be set to split
Shareholder revolt could see Western Digital forced to split off parts of its business
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Western Digital is reviewing several “strategic alternatives” for the future, including spinning off its flash andHDDfranchises, afer a shareholder revolt.
In a press release, the hard disk drive manufacturer and data storage company said the goal of the review is to optimize long-term value for its shareholders. Its Executive Committee Board, led by the CEO, David Goeckler, will oversee the assessment process.
“The Board is aligned in the belief that maximizing value creation warrants a comprehensive assessment of strategic alternatives focused on structural options for the company’s Flash and HDD businesses,” said Goeckeler.
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Several alternatives
“Through this process, we are actively engaging in a broad range of strategic and financial alternatives that will help further optimize the value of Western Digital, including Elliott’s offer to invest incremental equity capital in our Flash Business. We look forward to continuing our constructive dialogue with Elliott as this process unfolds.”
Eliott, the CEO is referring to, is actually Elliott Management, a prominent activist investor who recently disclosed a stake of nearly $1 billion in the company. The investor, who owns roughly 6% of Western Digital, is also one of the more vocal proponents of the split.
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“We’re encouraged by the positive direction of our discussions so far, and by Western Digital’s openness to considering a full separation of its Flash business,” commented Elliott Managing Partner Jesse Cohn and Senior Portfolio Manager Jason Genrich said. “We are pleased that Western Digital’s Board is conducting this review, and Elliott is prepared to provide strategic resources and additional capital to help the company realize the full value of both of its businesses.”
Reutersclaims Eliott also offered more than $1 billion of incremental equity capital into WD’sflashbusiness, at an enterprise value of anywhere between $17 and $20 billion.
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Via:Reuters
Sead is a seasoned freelance journalist based in Sarajevo, Bosnia and Herzegovina. He writes about IT (cloud, IoT, 5G, VPN) and cybersecurity (ransomware, data breaches, laws and regulations). In his career, spanning more than a decade, he’s written for numerous media outlets, including Al Jazeera Balkans. He’s also held several modules on content writing for Represent Communications.
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