Mark LaPedus

EE Times

(04/14/2006 11:20 AM EDT)

SAN JOSE, Calif. — Flash-card supplier SanDisk Corp. has hired Morgan Stanley to help it consider a possible bid to acquire rival Lexar Media Inc., which is in the process of being acquired by Micron Technology Inc., according to Reuters..

As previously reported, Intel Corp., Micron, and SanDisk were among the 11 companies that made a bid to acquire Lexar, according to a report, which also indicated that SanDisk is still in the bidding picture.

But recently, semiconductor maker Micron (Boise, Ida.) announced plans to acquire flash-memory product maker Lexar (Fremont, Calif.) for $680 million.

Among the other bidders, Intel backed out of a deal to buy Lexar, according to American Technology Research Inc. Flash-memory product rival SanDisk also made a bid to acquire Lexar for $8.75 a share, Chillara said in a recent report. In comparison, Micron’s bid for Lexar is said to be $8.11 a share, the research firm said.

SanDisk apparently did not pursue its original offer for Lexar, but the market is now “anticipating another offer from SanDisk or another third party,” according to the research firm.

Indeed, there is mounting pressure for Lexar to look at other bids. Several investment firms, including billionaire financier Carl Icahn, are attempting to block Micron’s proposed $680 million deal to acquire Lexar.

The investment firms are reportedly putting pressure on Lexar to find a better suitor. Micron’s bid for Lexar is too low, according to the firms. But so far, a new bidder has not apparently surfaced, giving Micron the upper hand in the deal, according to reports.