Western Digital $20 billion all-stock offer for Kioxia poses valuation, cash challenge - analysts

The logo of Western Digital Corporation is displayed at the company's headquarters in Tokyo, Japan, May 27, 2019. REUTERS/Yoshiyasu Shida

(Reuters) - A possible merger between storage hardware maker Western Digital Corp with its Japanese partner and chipmaker Kioxia Holdings could create a NAND memory chipmaking giant that rivals Samsung Electronics.

But analysts are questioning whether Kioxia's investors will accept the price and terms of the reported $20 billion all-stock offer from Western Digital, which would provide no cash to the Japanese firm and put a lower value on it than other comparable deals in the industry. Western Digital on Friday filed documents to issue more shares but did not disclose the size of the offering.