Hynix shares plunge on Micron tax report


Shares in Korea's Hynix Semiconductor were sliding Monday

SEOUL, South Korea -- Shares in Korean memory chipmaker Hynix Semiconductor tumbled sharply in early trade Monday after reports potential suitor Micron Technology wants a tax break to clinch the deal.

Hynix shares were down 7.7 percent at 1860 won by mid-morning Monday, while rival Samsung Electronics was up about 0.7 percent

U.S.-based Micron has asked for a seven-year tax break in its $4 billion negotiations to take over the memory business of Hynix, according to the Chosun Ilbo newspaper.

The newspaper quoted an unnamed official of the Hynix creditor group as saying Micron also withdrew its earlier plan to invest $200 million in the non-memory business of the Korean chipmaker.

If Micron succeeds in its bid to buy the memory chip business of Hynix, it would overtake Samsung Electronics as the world's biggest memory chipmaker.

Creditors expected to meet

Hynix's chief executive Park Chong-sup returned last Wednesday from the United States where Micron had offered renewed proposals.

Hynix and Micron said on December 2 they would hold exploratory discussions regarding a "possible strategic alliance or other transaction."

Park and Micron chairman Steve Appleton said at the time: "Both companies are evaluating a broad array of strategic options."

Hynix's creditors, led by Korea Exchange Bank, are expected to meet early this week to discuss the proposals, according to Reuters news agency.

But Yonhap news agency reported at the weekend that Hynix creditors may decide against selling off the memory chip business and will offer a counter-proposal.

Korea's benchmark Kospi index was up 7.21 points or 0.92 percent at 790.80 in late morning trade Monday.