SEOUL, South Korea – Samsung Electronics Co. said Wednesday it has withdrawn a $26 a share bid to acquire SanDisk Corp., but suggested it was still interested in buying the U.S. flash memory card maker at a lower price.
In a letter dated and released Wednesday, Samsung Vice Chairman and CEO Lee Yoon-woo informed SanDisk's board that "we are no longer interested in acquiring SanDisk at $26 a share."
The letter said the offer was being withdrawn "after nearly six months of efforts to pursue a transaction with no meaningful progress."
Milpitas, California-based SanDisk, which last month rejected the bid, said in a statement Wednesday that Samsung's announcement came despite SanDisk having outlined a path for further discussions of the offer.
Samsung never contacted SanDisk regarding the proposal after SanDisk's board wrote a letter to Samsung on Sept. 15, the statement said.
"We believe this raises questions about the real motivations behind Samsung's offer," SanDisk said.
In rejecting the bid, Sandisk's board had determined the $5.85 billion takeover offer was "inadequate in multiple respects" and "opportunistic." Suwon, South Korea-based Samsung had said the offer was "full and fair."
Samsung spokesman James Chung said Wednesday that a deal could still be done.
"The point is at the moment SanDisk has been reluctant to begin serious discussion about the M&A issue," he said.
SanDisk is the world's largest supplier of flash storage card products. Samsung is the world's largest manufacturer of NAND flash memory chips used in digital devices such as cameras and music players.
"This is good for Samsung," semiconductor analyst Jim Handy of the Objective Analysis research firm wrote after the bid's withdrawal. "Samsung's stockholders will be rewarded if the company can acquire SanDisk at the lowest possible price."
In his letter, Lee told SanDisk that Samsung had determined that acquiring the company amid what he called "growing uncertainties in your business" went against "obligations to our own shareholders."
Lee cited SanDisk's third-quarter earnings results and its relationship with Japan's Toshiba Corp. as points of concern.
SanDisk announced Monday it had posted a loss of $155 million in the third quarter on a drop in revenue as excess inventory forced it to cut prices.
The company said earlier that day it would sell to Toshiba, a Samsung rival, about 30 percent of the manufacturing capacity of their joint ventures.
Shares in Samsung Electronics fell 2.1 percent to close Wednesday at 508,000 won ($373).