Shutterfly Shares Sink On Aborted Merger Talks

Shutterfly, Inc. SFLY fell sharply after its expected acquisition by the private equity firm Silver Lake fell through, according to reports.

The now-aborted deal was to also to have included buying Snapfish, a unit of Hewlett-Packard, according to Bloomberg news service, which said Silver Lake sought to combine the two photo-sharing services.

Silver Lake backed off its interest in Snapfish after looking at its books, and still could make a deal with Redwood City, California-based Shutterfly, although an initial deadline for the talks has expired, according to the report.

Silver Lake had contemplated a $2.57 billion offer for Shutterfly according to Bloomberg, which would equal about $66.77 per share.

Following initial reports in September that Silver Lake aimed to acquire Shutterfly for about $2 billion, two major Shutterfly shareholders said "fair value" for Shutterfly is "significantly above" $52 a share.

Mario Cibelli and Marathon Partners Equity Management, LLC who together hold more than a 10.5 percent stake in Shutterfly, made the statement in an SEC filing.

Shutterfly traded recently at $42.12 per share, down 10.3 percent.