Western Digital announced that it has entered into exchange agreements with certain institutional investors under which the company will receive ~1.9M shares of common stock in exchange for ~653,203 shares of Sandisk (SNDK), with settlement expected on May 7th subject to customary closing conditions. At current SNDK price, the exchange is valued at ~$0.9B in aggregate consideration. Post-settlement, WD will retain ~1.0M SNDK shares (~$1.4B at current SNDK levels) which it intends to dispose of through 1) additional debt-for-equity exchanges with WD creditors, 2) further share-for-share exchanges, and/or 3) distributions WD stockholders as a dividend. We think this share-for-share exchange allows WD to