Seagate offers $90.3 million for Solyndra property: court filing

Reuters News
Posted: Aug 23, 2012 2:55 PM
Seagate offers $90.3 million for Solyndra property: court filing

By Ilaina Jonas

NEW YORK (Reuters) - Seagate Technology Plc <STX.O>, maker of hard drives and storage devices, has agreed to pay $90.3 million for the former manufacturing plant and headquarters building of bankrupt Solyndra LLC, which was financed by a controversial government loan, according to bankruptcy court documents.

Seagate's offer will be considered an initial bid, or "stalking horse," which could be topped by a competing offer of at least $1 million more when an auction is held, according to court documents filed late Wednesday. A hearing to set the terms and date for the auction and declare Seagate's offer the stalking horse has been set for September 24.

Reuters was the first to report that Cupertino, California-based Seagate had reached an agreement to buy the property.

Should a higher bid emerge, Seagate would be entitled to a breakup fee of $1.8 million, a little less than 2.6 percent of the technology company's offer.

Solyndra's Fremont, California, building cost more than $300 million and was completed in 2010, according to prior court documents.

Solyndra, which manufactured cylindrical solar panels, rose to fame after President Barack Obama visited in 2010 as part of the administration's efforts to promote jobs in renewable energy. Solyndra had received a $535 million federal loan guarantee to build a factory in Fremont.

Solyndra's bankruptcy has been politically embarrassing for the administration as Republican lawmakers jumped on it as an example of failed energy policy and government waste leading up to the 2012 presidential election.

Although another offer could appear, it would follow two attempts to widely market the property. Imperial Capital LLC, Solyndra's financial adviser and investment bank, began marketing the property to 150 potential buyers from more than a dozen countries in 2011. But that effort resulted in no acceptable offer, according to court documents.

In February, Solyndra hired Jones Lang LaSalle Inc <JLL.N> to market the property. It attracted interest from U.S., Chinese and European companies involved in industries such as solar energy, medical-related products, data centers and other technologies that need an ultra-clean manufacturing environment, court documents said.

The highest bid came from Seagate.

The building, located on 30 acres in the southeast section of the San Francisco Bay Area, comes with 31,000 square feet, or two floors, of office space.

The high-tech manufacturing facility was built to withstand an earthquake. It is serviced with 22 megawatts of power and backed up by two diesel emergency generators, each with a 2 megawatt capacity. It also is equipped with Solyndra solar panels on the roof that can generate 1.2 megawatts of power.

The property includes plans to expand the facility by more than 200,000 square feet.

The bankruptcy case is In re Solyndra LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12799.

(This story is refiled to add dropped word in paragraph 2)

(Reporting By Ilaina Jonas; Editing by Maureen Bavdek)