Seagate rejects offer from rival Western Digital

Seagate Technology, the disk-drive maker that ended takeover talks with TPG Capital, also turned down a proposal from competitor Western Digital Corp., according to two people with knowledge of the matter.

A combination with Western Digital would have faced antitrust obstacles and may have resulted in management departures, said the people, who declined to be identified because the talks were private.

Western Digital indicated to Seagate it was willing to pay 10% to 50% more than TPG, one person said. TPG had considered offering more than $7.5 billion, people familiar with the matter said in October.

Seagate, which has a market value of about $6.9 billion, said Monday it ended discussions with private-equity firms because the indicated deal value wasn’t in the best interest of the company or its shareholders. TPG couldn’t find enough equity partners to finance a takeover after KKR & Co. and Bain Capital lost interest in a transaction, one person familiar with the situation said at the time.

Western Digital made its approach after Seagate said Oct. 14 that it received interest about a going-private transaction, one person said. The Lake Forest company has a market value of about $8 billion. It had cash and equivalents of about $2.9 billion and $375 million in debt as of Oct. 1.

Brian Ziel, a spokesman for Seagate, and Steve Shattuck, a Western Digital spokesman, declined to comment. Seagate has offices in Dublin, Ireland, and Scotts Valley, Calif.