Seagate Technology plc has announced it has ceased discussions with private equity firms as it believed the valuation range was not in the company’s best interest, and has instead announced an additional US$2bn repurchase authorisation of its outstanding ordinary shares.
The technology firm said it appreciated the interest shown by equity firms.
“Our dialogues with them were extensive and thoughtful,” said Steve Luczo, Seagate chairman and CEO.
“However, management and the board have chosen to cease discussions concerning a private equity-led leveraged buyout. Given the strong debt markets, improving business conditions and other financing options, Seagate has initiated a plan to further optimise its capital structure to maximise shareholder returns.”
Seagate expects to fund the share repurchase through a combination of cash on hand, future cash flow from operations and potential alternative sources of financing.
The firm believes that demand is up for its hard disk drives and it expects to shift 170 million units in the December 2010 quarter.