Conner Peripherals Inc, likely on its way to Seagate Technology Inc, would look a safer bet as part of Seagate, and Standard & Poor’s Corp placed the single-B rating on its subordinated debt on ratings review with positive implications following the announcement of the proposed deal. The amount of Conner’s rated debt is $519m. Standard & Poor’s affirmed its double-B-plus rating of Seagate’s subordinated debt; the outlook remains stable and on completion of a merger, Conner’s debt rating would be raised to reflect the combined company’s leading market position in the highly competitive disk drive market, complementary component product lines, and substantial financial strength: Seagate’s cash balances in excess of $1,200m provide ample flexibility to absorb potential merger costs.
