San Jose, California-based high-capacity disk drive maker Maxtor Corp has had such a hole knocked in its balance sheet by the price wars in the disk drive market that it has had to turn to Hyundai Electronics Industries Co Ltd of Seoul, South Korea for what is in effect a rescue investment. Hyundai has signed a letter of intent to invest $150m in exchange for about 19.4m new Maxtor shares, which will give it a 40% stake in the company. The price per share is at a handsome premium to the market price – it works out at about $7.75 a share, and Maxtor shares are currently trading at around $5.375. Hyundai has agreed a standstill whereby it will not increase its stake above 45%. Maxtor hopes a definitive agreement will be concluded in September, with the transaction closing in November. Maxtor says it will issue a special series of common to Hyundai, and Hyundai will be represented on the board, in proportion to its share ownership.
