SAN FRANCISCO 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 plan 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 Elpida's website.
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).
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 clients.
Last week, a U.S. judge overseeing Elpida's parallel U.S. case said the company was taking a risk by not keeping creditors better informed.
That U.S. judge would eventually have to approve the transfer of U.S. assets.
(Reporting By Noel Randewich; Editing by Bob Burgdorfer)