Western Digital (NASDAQ:WDC) is set to generate approximately $3.17 billion by divesting a portion of its holding in former subsidiary Sandisk (NASDAQ:SNDK), as part of efforts to lower its debt burden.
Sandisk said Wednesday that the shares are being offered through a secondary sale at a 7.7% discount to the stock’s previous closing price.
Under the arrangement, Western Digital will exchange the 5.8 million shares included in the offering for debt held by affiliates of J.P. Morgan and BofA Securities. The two banks—acting as lead bookrunners—will then sell the shares on behalf of their respective affiliates.
Sandisk shares declined about 2.13% in after-hours trading on Tuesday. Bloomberg News had earlier reported details of the pricing range for the transaction.
Following the sale, Reuters calculations suggest Western Digital will retain a stake valued at roughly $1 billion, which it has indicated it plans to sell over time.
Western Digital did not immediately respond to a request for comment from Reuters.