Is Micron Dating a Runaway Bride?

It ain't over till the overweight soprano sings, people.

If you were banking on Micron Technology (NAS: MU) absorbing rival memory maker Elpida, that lady just drew breath for a second verse. Micron's winning bid in Elpida's bankruptcy auction has met with fresh resistance from a group of the troubled company's creditors.

According to court papers filed in Japan over the weekend, Micron's $2.5 billion takeover offer now faces a much smaller bid from 20 of Elpida's bondholders, including New York hedge funds Linden Advisors and Owl Creek Asset Management. These firms are also talking to other deep-pocketed entities to drum up some more cash for their Elpida bid.

Though Micron won the official bidding and had its offer approved by Japanese bankruptcy courts, the creditors still feel that the final bid was too low. They'd rather inject another $383 million loan into the company and then try to turn around the firm on its own. The new bidders have about $1.2 billion of Elpida bonds to worry about.

Nobody knows if the new bid is totally serious, though. According to an unnamed analyst interviewed by Reuters, this could be a ploy to squeeze a higher bid out of Micron. The analyst said there's "a slight chance" that Elpida might end up under creditors' control.

Micron's final restructuring plan is due in two weeks. If the company builds in some protection for local Elpida jobs in Japan, the creditor bid could lose steam in a hurry.

I expect Micron to walk away with the big prize in the end, just about doubling its DRAM memory sales in the process, but it could take some negotiating finesse to get it done. Fire up some popcorn and grab a comfy chair -- this will be interesting, to say the least.

With Elpida under its wing, Micron would suddenly become a major parts supplier to Apple, with instant credibility in the mobile computing market. Click below to find out why investors are so excited about this exploding trillion-dollar revolution, and why Micron is willing to bend over backward for this deal.

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