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Spansion to make killing in IPO

Posted: 07 Nov 2005 ?? ?Print Version ?Bookmark and Share

Keywords:dram? memory? ddr2?

Flash-memory semiconductor supplier Spansion LLC disclosed more details about its proposed initial public offering (IPO), saying that it hopes to make a killing in the process, according to new documents filed in the U.S. Securities and Exchange Commission (SEC) on Friday (Nov. 4).

In the IPO, Spansion hopes to sell 35,294,118 shares of Class A common stock at a price between $16.00-to-$18.00, according to an amended S-1 filing issued by the company.

In addition, Spansion is making a public offering of 8 million shares of mandatory convertible preferred stock, with a price of $25 per share. Its indirect subsidiary intends to issue up to $400 million in a private placement of senior unsecured notes.

Spansion said it estimates it will receive $561 million in net proceeds from the IPO, and $193 million in net proceeds from the sale of convertible preferred stock, according to reports.

In total, the company could have a valuation of roughly $1.8 billion, said Les Santiago, an analyst with Piper Jaffray. Citigroup and Credit Suisse First Boston are the lead underwriters for the IPO.

Spansion, the flash memory venture of Advanced Micro Devices Inc. and Fujitsu Ltd, filed for the IPO in April. With the flash memory market plagued by a capacity glut and falling prices, memory suppliers have undergone rough sledding in recent months.

Spansion has been hit hard in the depressed NOR market. And analysts have called for AMD to focus on its growing microprocessor business by withdrawing its stake in the venture. AMD owns 60 percent of Spansion (see April 13 story).

For fiscal 2004 and the first nine months of fiscal 2005, Spansions net sales were $2.3 billion and $1.4 billion, respectively. Net losses for these periods were $20 million and $257 million.

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