SanDisk has rejected an unsolicited takeover bid from hardware maker Samsung Electronics, saying that the bid undervalued the company.
The two firms had been in takeover talks for about four months, but Samsung went public with its offer Tuesday, apparently after discussions had broken down.
"Our offer insulates your shareholders from the risk of market conditions that have severely deteriorated and are expected to remain challenging," Samsung Vice Chairman and CEO Yoon-Woo Lee wrote in a letter to SanDisk executives that Samsung released Tuesday.
SanDisk Chairman and CEO Eli Harari responded in a statement that his company was willing to discuss a takeover, but that the US$26 (£14.40) per share offer was "opportunistically timed at the trough of an industry-wide downturn" and undervalued the flash card maker.
SanDisk also suggested that the offer may be a "calculated negotiating ploy" aimed at gaining the upper hand in an ongoing patent-licensing dispute between the two companies.
The company's board of directors sent a letter to Samsung stating that it had unanimously rejected the deal.
Samsung argues that a combination of the companies would create a powerful global brand and allow the resulting company to position Flash as the preferred technology for delivery and storage of content.
While Samsung said that SanDisk was a technology leader and had an innovative culture, it also argued that independently investing in the necessary facilities required to further technology innovation would be a significant tax on SanDisk's business.
Should the deal go through, Samsung would continue to operate SanDisk as a separate subsidiary and would not plan to lay off workers, it said.