Chipmaker Micron and hard disk drive-maker Western Digital are in talks with memory chip-maker SanDisk about a possible acquisition, Bloomberg reported yesterday.
SanDisk, valued at about $12.6 billion as of the stock's close yesterday, has hired a bank to help with the process, Bloomberg reported, citing sources familiar with the matter.
No decision has been made and the talks may not result in a transaction, Bloomberg said.
Shares of SanDisk - which makes flash-memory products for cloud computing, data centre, smartphones and laptops - rose 12% to $69.20 in extended trading yesterday. Micron was up 3% and Western Digital under 1%.
SanDisk, Western Digital and Micron were not immediately available for comment.
Micron and Western Digital seemed "perplexing" suitors for SanDisk, Wedbush Securities analyst Betsy van Hees said, adding Micron already had a significant flash memory operation.
Western Digital mainly makes traditional hard drives. SanDisk's flash-memory chips are used in solid-state drives, which are faster and more reliable than traditional hard drives.
A Chinese conglomerate could be the most interested party to potentially acquire SanDisk, Van Hees said, as China looks to step up its modest but up-and-coming chip industry.
China's state-backed Tsinghua Unigroup, a technology conglomerate, has been pursuing Micron, according to media reports. It has offered $23 billion for Micron, but the plan has been clouded by US security concerns.
Tsinghua's unit said in late September that it would invest $3.78 billion in Western Digital, worth a 15% stake. Analysts have said the cash infusion could allow Western Digital to take bigger steps in flash and solid-state storage, its key interest areas.
SanDisk's stock has dropped about 37% year-to-date as the company grappled with falling prices in the flash memory market and lean inventory levels.
A delay in sales of certain embedded parts used in solid-state drives has also weighed on the company's results.
California-based SanDisk would reject any offer that was less than $90 per share, Nomura analyst Romit Shah had said last week.