State-owned Chinese company wants to buy out Micron, but analysts term bid a ‘long shot’

The news overnight that Boise’s home-grown Micron Technology is the target of a buyout offer from a state-owned Chinese company was a stunner, but analysts told Idaho Statesman reporter Bill Roberts a takeover is a “long shot,” and the $23 billion bid from Tsinghua Unigroup Ltd. of Beijing is a “low-ball” offer. Though it’s more than Micron’s current value – the reported bid is $21 a share, and Micron closed Monday at $17.61 after its stock prices had taken a beating over the past six months – experts said the company’s long-term value is much higher. Plus, the United States government could nix such a takeover, with Micron the only remaining U.S. manufacturer of DRAM chips used in personal computers.

Micron was founded in 1978 in a garage by two Boise twins, Ward and Joe Parkinson. With funding from the late Idaho billionaire J.R. Simplot, who made his first fortune in potatoes before turning to computer chips, it went on to become a major multinational corporation, still headquartered in Boise, with tens of thousands of employees worldwide. It’s had big financial ups and downs over the years, including growth spurts and major layoffs, acquisitions and joint ventures. Bloomberg Business News reported that if completed, the deal would be the largest overseas takeover by a China-based company; it also reported this morning that Micron’s stock rose 10 percent in the first seven minutes of trading in New York, its biggest gain in 18 months. You can read their full reports here and here ; they describe Tsinghua Unigroup Ltd. as the investment arm of one of China’s top universities.

The Idaho Statesman’s full report is online here . The Wall Street Journal, which first reported news of the bid last night, has its full report online here , but a subscription is required; it described the buyout offer as “audacious” under the headline, “China’s Micron Bid Faces Great Wall of Scrutiny.” Micron’s spokesman said the company hadn’t received any offer.