Read-Rite Board, Shareholders Study Applied Magnetics Offer

Read-Rite Corp. said its board of directors met Tuesday and that the company was still considering an unsolicited $1.5-billion takeover bid from Applied Magnetics Corp., a rival manufacturer of computer disk drive parts.

“The board is pursuing their fiduciary responsibilities and reviewing the proposal with the best interests of Read-Rite shareholders in mind,” said Steve Polcyn, spokesman for Read-Rite.

He said a number of shareholders voiced opposition to the proposal at the Milpitas-based company’s annual shareholder meeting.

“The board has to pursue their responsibility, and that is to review in full detail the proposal from Applied Magnetics, and our investment bankers will do the same thing,” he said.

Polcyn declined to say when the review would be completed.

The companies compete in the market for disk drive heads, which read and write information on computer storage devices.

Goleta-based Applied Magnetics offered 0.679 share for each share of Read-Rite. At Tuesday’s stock price, the offer values Read-Rite at $32.67 a share, just less than its closing price for the day. The transaction would be worth $1.54 billion, down from $1.69 billion at Monday’s closing stock prices.

On Tuesday, Applied Magnetics shares fell $4.875 to close at $48.125 in New York Stock Exchange trading. Read-Rite shares rose 87.5 cents to close at $32.875 on Nasdaq.

Applied Magnetics said Monday that it would begin a consent solicitation aimed at replacing Read-Rite’s board with a new slate that would endorse the takeover bid.

Read-Rite has about 20,000 employees in Japan, Thailand, Malaysia, the Philippines and Singapore.