Micron's plan to buy Japanese memory chipmaker Elpida was given the thumbs up by a Tokyo court after it approved the agreement and dismissed a rival plan promoted by a group of bondholders.

The bankrupt Elpida's plan to be bought by Micron has been referred to creditors for approval. The court dismissed a rival proposal by a group of bondholders, led by hedge funds Linden Advisors, Owl Creek Asset Management and Taconic Capital Advisors, who have said the $2.5-billion price tag grossly undervalues Elpida.

They argued that that the company is worth $3.78 billion. However Elpida was driven into bankruptcy by falling chip sales and foreign competition. Micron is losing money due to a crumbling PC industry, wants to create larger economies of scale and offered in early July to buy Elpida for about $750 million in cash and to pay creditors a total of $1.75 billion in annual instalments through 2019.