Bain, KKR, Broadcom among suitors for Toshiba's chip business

Paterniano Del Favero
Mag 20, 2017

It was not clear if KKR and its partners would submit their offer by the end of the day. The Japanese company has also pointed out that Western Digital only became its joint venture partner by acquiring SanDisk Corp a year ago, in deal that Toshiba never had rights to approve.

Bain plans to bid around 1.5 trillion yen for a majority stake, two of the sources said, declining to be identified as talks were confidential.

Toshiba's future as a public company depends on selling the memory chip unit and raising cash to pay for losses in its Westinghouse nuclear business. The competing group, which includes state-backed Innovation Network Corp of Japan and Development Bank of Japan, plans to offer about 1.8 trillion yen and would benefit from support from the country's government, the people said.

KKR is expected one of the most favored bidders. "Regarding the acquisition of management stake of Toshiba's memory unit, we made a decision to join the final bid in partnership with a consortium", the Korean chipmaker said in its regulatory filing Friday afternoon.

SK Hynix is not expected to take a leading role in the offer, owing to anti-trust concerns. SK Hynix confirmed that its board has approved entering a final bid for Toshiba's NAND (non-volatile storage) chip business but declined to give details.

A Hong Kong-based representative for Bain declined to comment.

South Korea's SK Hynix Inc., the world's second largest memory chipmaker, has raised its appeal in its final bid for the world's second largest flash memory business from Toshiba Corp.by joining up with USA investment firm Bain Capital with influences in the Japanese corporate and government sector and promising to keep management under the Japanese company after buyout.

US chipmaker Broadcom and Silver Lake did not immediately rely to requests for comment outside of regular USA business hours.

SK hynix reportedly joined the consortium led by Bain Capital, which has set up a special-purpose company to acquire a 51 percent stake of Toshiba's memory unit.

Industry watchers had speculated that the SK consortium would raise the bidding price, possibly higher than 2 trillion yen, to win the lucrative deal.

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