Flash memory makerSanDisk has rejected a takeover bid from Samsung Electronics valued at $5.85 billion, or $26 a share, which the world's top maker of memory chips made late Tuesday.
Shares of SanDisk catapulted 53 percent on word of the offer, to near $23 in extended electronic trading. The stock closed Tuesday at $15.04.
Samsung said the offer isn't contingent on any new financing and would be funded by its cash on hand and existing financing.
Speculation arose earliler this month that Samsung would buy SanDisk, in a deal that could reshape a struggling industry.
An acquisition of SanDisk would expand Samsung's market share at a time when prices for flash memory, used in such products as digital cameras, cell phones and music players, are falling sharply.
The deal would also reduce Samsung's licensing costs by assuming control of SanDisk's popular technology.
Analysts said an acquisition could shift the balance of power in the flash memory industry away from Japan's Toshiba, which trails Samsung in the flash market but plans to nearly double its chip production capacity in partnership with SanDisk.
"Samsung buying SanDisk would mean big damage for Toshiba," said Yoshihisa Toyosaki, head of IT research firm J-Star.
SanDisk was the subject of speculation in August that computer storage drive maker Seagate Technologycould be interested in buying all or part of it.