Samsung reverses itself on SanDisk buyout, backs away

The economic upheaval around the globe just torpedoed another deal. South Korean electronics giant Samsung said it will abandon its effort to acquire computer memory and consumer electronics manufacturer SanDisk, noting a particularly shaky environment for SanDisk's various markets it sells into.

Samsung CEO Lee Yoon-woo told CNBC that "Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung." Yowza. Nothing like going from one extreme to the other. But he's right - SanDisk's outlook has gone down the toilet. Along with it went Samsung's $5.9 billion takeover offer.

Yoon-woo went on to say that his company is no longer interested in buying SanDisk for $26 per share. Don't think Samsung won't be back at some point if SanDisk's share price trails downward, though. SanDisk already told Samsung to get lost when the bid was announced, but Samsung - to me - is still very interested in getting its hands on SanDisk. When the initial bid was announced, SanDisk said that Samsung's bid failed to recognise the intrinsic value of SanDisk's intellectual property. What intrinsic value? Commodity memory and consumer electronics products?