We are investigating the Board of Directors of SanDisk for possible breaches of fiduciary duty and other violations of state law in connection with the sale of SanDisk to Western Digital.
SanDisk’s long-term financial outlook is positive and yet shareholders will receive only $86.50 per share, well below its 52-week high. Western Digital is well aware of SanDisk’s improving financial metrics and is purchasing SanDisk at a substantial discount. The merger agreement unreasonably limits prospective bids by (i) prohibiting solicitation of any further bids, and (ii) imposing a termination penalty should SanDisk receive and accept a superior bid. SanDisk’s insiders and their affiliates own significant stock, and will receive millions of dollars as part of change of control arrangements. These insiders can unduly influence a sale of SanDisk, which may not be in the best interests of non-insider shareholders. Our investigation centers on the conduct of SanDisk’s Board of Directors, who have unanimously approved the transaction, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for SanDisk given its current financial condition and prospects.