* Tokyo court dismisses rival proposal by group of Elpida
* Elpida bondholder group says $2.5 bln price tag
* Group to vote against trustee's plan, to urge other
creditors to do the same
SAN FRANCISCO/TOKYO, Oct 31 Micron Technology's
plan to acquire Japanese memory chipmaker Elpida took a big step
toward completion after a Tokyo court approved the agreement and
dismissed a rival proposal promoted by a group of bondholders.
A district court in Tokyo said on Wednesday it was referring
bankrupt Elpida's plan to be bought by U.S. chipmaker Micron
to creditors for approval, according to a news release on
The court said it dismissed a rival proposal by a group of
bondholders, led by hedge funds Linden Advisors, Owl Creek Asset
Management and Taconic Capital Advisors, who have said the
$2.5-billion price tag grossly undervalues Elpida, arguing that
the company is worth 300 billion yen ($3.78 billion).
The bondholder group said in a statement on Thursday that
they would vote against the trustee's plan and urged other
creditors, including secured lenders, trade creditors and
individual Japanese bondholders, to do the same.
"The bondholders will continue to pursue the rights and
remedies available to them in the Japan, U.S., and other
applicable courts," they said.
Elpida, the last of Japan's dynamic random access memory
(DRAM) chipmakers, was driven into bankruptcy by falling chip
sales and foreign competition.
Boise, Idaho-based Micron, which is losing money due to a
crumbling PC industry, wants to create larger economies of scale
and offered in early July to buy Elpida for about $750 million
in cash and to pay creditors a total of $1.75 billion in annual
installments through 2019.
The deal would catapult Micron into the No. 2 spot in the
global market for DRAM chips, behind Samsung Electronics
"We view this as a positive development, and continue to
expect Micron to close its Elpida acquisition by (the first half
of 2013)," Jefferies analyst Sundeep Bajikar said in a note to
Last week, a U.S. judge overseeing Elpida's parallel U.S.
case said the company was taking a risk by not keeping creditors
That U.S. judge would eventually have to approve the
transfer of U.S. assets.