ValueAct Capital Takes Larger Stake in Seagate
September 09 2016 - 11:10AM
Dow Jones News
Seagate Technology PLC said Friday that ValueAct Capital will
increase its stake in the company, making it one of the disk drive
maker's largest shareholders and giving it a look at the company's
inner workings.
ValueAct Capital and Seagate are together buying 12.5 million
shares of Seagate stock in a so-called block transaction. About 9.5
million of those shares will go to ValueAct, which already holds
about 3 million shares of the company, according to FactSet data.
The transaction is expected to close within the month.
With the stock purchase, ValueAct has been invited to serve as
an observer on Seagate's board of directors.
Seagate Chief Executive Steve Luczo said the company approached
ValueAct given their track record "in creating long-term value for
the companies in which they invest."
Seagate has been suffering due to decreased demand for personal
computers that use its products. In addition, computer makers are
adopting storage devices based on flash memory chips rather than
magnetic disks, a shift that has affected Seagate and other drive
makers.
In July, it said it is cutting about 6,500 jobs globally,
roughly 14% of its workforce, less than two weeks after it
announced a reduction of 1,600 positions.
Last month, Seagate reported its earnings fell 49% in the latest
quarter as the bottom line was hit by expenses related to the
cost-cutting efforts and other items.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
September 09, 2016 11:55 ET (15:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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