S&P puts SanDisk on developing watch

Standard & Poor's said it placed its B+ corporate credit and senior unsecured ratings on SanDisk Corp. on CreditWatch with developing implications following the announcement that Samsung Electronics Co. Ltd. offered to acquire the company for about $5.8 billion in cash. SanDisk rejected the offer, but the announcement generated reports that Toshiba Corp. may be interested in acquiring the company.

The agency said that if SanDisk is acquired by either of these companies, the ratings on SanDisk's senior unsecured debt will likely be raised, although the extent of any upgrade would depend on strategic and structural considerations of the transaction.

Alternatively, if SanDisk remains independent, the company faces significant pressure on earnings and cash flow over the near term, S&P said, and the rating could be lowered if liquidity depletes to less than $2 billion over the coming quarters.

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