Samsung has decided to walk away from its planned takeover of Sandisk, but made sure it left visible wounds on the hapless flash-card maker. And, perhaps worst of all for Sandisk's current management, signalled to the markets that a deal is still possible but at a much-reduced price. The decision gives Samsung a lot more options over what it can do with all the cash it has in the bank in an environment where companies with heavy borrowings have suddenly become vulnerable.
The first paragraph is standard fare in these letters. Samsung CEO Yoon Woo Lee expresses disappointment with Sandisk's unwillingness to negotiate a deal. The gloves come off in the second paragraph - and reveal a pair of bejewelled knuckledusters:
"Nevertheless, we have obligations to our own shareholders which require that we take a disciplined approach, particularly with respect to significant initiatives such as this. That disciplined approach requires that we squarely face the growing uncertainties in your business, which may continue to deteriorate in this difficult economic environment and further impact your standalone value. Your recently announced third quarter results serve only to illustrate this risk. Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung."
And then Lee rounds it off with:
"As a result of these developments, we are no longer interested in acquiring SanDisk at $26/share."
To sign off, Lee wishes Sandisk's management well in a kind of "now that you're lying in the street try not to get run over" way.