ValueAct Capital Takes Larger Stake in Seagate

Seagate Technology PLC said Friday that ValueAct Capital will increase its stake in the company, making it one of the disk drive maker's largest shareholders and giving it a look at the company's inner workings.

ValueAct Capital and Seagate are together buying 12.5 million shares of Seagate stock in a so-called block transaction. About 9.5 million of those shares will go to ValueAct, which already holds about 3 million shares of the company, according to FactSet data. The transaction is expected to close within the month.

With the stock purchase, ValueAct has been invited to serve as an observer on Seagate's board of directors.

Seagate Chief Executive Steve Luczo said the company approached ValueAct given their track record "in creating long-term value for the companies in which they invest."

Seagate has been suffering due to decreased demand for personal computers that use its products. In addition, computer makers are adopting storage devices based on flash memory chips rather than magnetic disks, a shift that has affected Seagate and other drive makers.

In July, it said it is cutting about 6,500 jobs globally, roughly 14% of its workforce, less than two weeks after it announced a reduction of 1,600 positions.

Last month, Seagate reported its earnings fell 49% in the latest quarter as the bottom line was hit by expenses related to the cost-cutting efforts and other items.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

September 09, 2016 11:55 ET (15:55 GMT)

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