Memory chip maker Western Digital said it will receive $900 million through a convertible preferred stock deal from private equity firm Apollo Global Management and hedge fund Elliott Management Corp.
Western Digital said the preferred stock it sold to Apollo and Elliott has a conversion price of $47.75 per share, which is approximately a 9 percent premium on its closing price of $43.95 on Tuesday.
Last year, Western Digital launched a review of strategic alternatives, including options for splitting off its flash-memory and hard-drive businesses, after activist Elliott disclosed a stake of nearly $1 billion in the company and pushed it to separate those businesses.
Western Digital CEO David Goeckeler said the partnership with Apollo and Elliott would help facilitate the next stages of Western Digital’s strategic review.
The latest investment is a precursor to a potential merger between Silicon Valley-based Western Digital and Japan’s Kioxia Holdings.
Western Digital and Kioxia jointly produce NAND chips, which are used in smartphones, TVs, data center servers and public announcement display panels.