After the market close, Bloomberg reported that Western Digital and Kioxia have restarted talks to merge the two companies into a public traded company, Deutsche Bank analyst Sidney Ho tells investors in a research note. The analyst says the news does not come as a total surprise given Western Digital and activist investor, Elliott Investment Management, have been conducting a strategic review since June 2022. Strategically, it would "make a lot of sense" given Western Digital and Kioxia are long-time joint venture partners for flash memory manufacturing at various locations in Japan, contends Ho. He believes the transaction, if completed, should be positive for Western Digital’s share price, saying the current share price is pricing in almost no value for its flash business. Ho keeps a Hold rating on the name with a $40 price target.
Published first on TheFly
See today’s best-performing stocks on TipRanks >>
Read More on WDC:
- WDC Up on Possible Merger
- Western Digital, Kioxia said to revive merger discussions, Bloomberg reports
- Early notable gainers among liquid option names on January 4th
- Western Digital debt covenant adjustments a negative, says Wells Fargo
- Western Digital call volume above normal and directionally bullish