Lake Forest-based disk drive maker Western Digital Corp. made an attempt to buy its top rival, Seagate Technology LLC, in October, according to Bloomberg.
Seagate had been in talks with a potential private equity buyer after it said it would “explore strategic options” earlier this year.
This week, Seagate said it ended talks with Texas-based TPG Capital, which appeared to be the front-runner as a buyer.
In the process, the company reportedly turned down a proposal from Western Digital, Bloomberg said, citing anonymous sources who were familiar with the takeover talks.
Western Digital seems to have tried to outbid TPG, according to Bloomberg.
“Western Digital indicated to Seagate it was willing to pay 10% to 50% more than TPG,” according to the report.
TPG had considered offering more than $7.5 billion.
Seagate sees yearly sales of $11 billion had a recent market value of about $7 billion. Western Digital sees yearly sales of about $10 billion and had a recent market value of $8 billion.
Western Digital is the top maker of disk drives for computers and consumer electronics by shipments, followed closely by Northern California’s Seagate.
The deal could have fallen through because it would have likely brought on anti-trust issues and resulted in a big management shakeup, Bloomberg said, citing sources familiar with the private talks.
Seagate announced earlier this week it ended sale talks because it saw improving conditions ahead.
In October when talks began, “Seagate’s management strongly felt that the stock was undervalued and thus explored buyout opportunities,” said analyst Kaushik Roy of Wedbush Securities Inc. in San Francisco.
“Business conditions have since improved and we believe Seagate management feels the price offered by private equity does not reflect the prospects of the company,” Roy said.