When Buyouts Hunt For Deep Value Tech (STX, WDC)

Seagate Technology plc (NASDAQ: STX) was one of our “Deep Value Tech Stocks” we recently screened as technology stocks with dirt cheap valuations.  We had noted a prior interest with private equity before, but now the company has taken this a step further.  Its rival Western Digital Corporation was also on our screen and it is up in relation.

The stock was halted after a press release noted that Seagate “received a preliminary indication of interest regarding a going private transaction.” More importantly, Seagate said it is “in discussions with the party from whom it received the indication of interest, and its board of directors is evaluating the indication of interest and other strategic alternatives.”

Another feather in the cap of those who believe this should be acquired is that Seagate retained Morgan Stanley and Perella Weinberg Partners LP to provide financial advice.  It also retained Wilson Sonsini Goodrich & Rosati and Arthur Cox as legal counsel.

As with all ‘going private’ deals, there are no sure things.  The company noted as a C.Y.A. note that there is no assurance that the company will receive a formal offer or that any transaction will take place.  More importantly it stated, “Neither the company nor its representatives will be providing any additional comments regarding the preliminary indication of interest.”

Seagate was halted after closing down 0.4% at $12.69 and the shares are now up 20% at $15.30 in the after-hours trading session.  Western Digital Corporation (NYSE: WDC) shares are up 8.5% at $32.00 in the after-hours session in conjunction.  As a reminder, Seagate already went private before in 2000 and came public again in 2003.

Again, here is that list of tech value screens.

JON C. OGG