Last-minute bidding heats up as Toshiba chip sale nears

Shareholders at Toshiba have just over two weeks to decide who to sell its chip business to. With a number of deals already on the table from investors around the world, the bidding war is heating up. In the latest twist, a consortium led by the Japanese government looks to have thrown a late bid into the ring.

Toshiba is hoping to replenish its depleted accounts with investment of at least $18 billion for its NAND chips production unit. The Japanese government has been keen to keep the technology within the country ever since Toshiba announced the sale to replenish funds lost to the now bankrupt Westinghouse nuclear unit. Now a state-backed fund, the Innovation Network Corp of Japan (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep Toshiba on Japanese shores.

The nature of the consortium is however up for debate. Last week, the INCJ was part of a proposed bid by US chipmaker Western Digital that also included private equity firm KKR & CO. However Reuters is now reporting that the INCJ is lining up bids in conjunction with US private equity firm Bain Capital as well as a consortium that included Bain, KKR, SK Hynix and the Development Bank of Japan. Who the INCJ has teamed up with remains to be seen, but they are likely favourites to claim the business when it comes to auction.

Meanwhile, Foxconn has reportedly tabled an offer in conjunction with Apple and Dell. The Taiwanese firm is also in discussions with Alphabet Inc’s Google, Microsoft Corp and Cisco Systems Inc about their participation in the bid.

Any deal is however still in jeopardy with Western Digital taking legal action to stop the sale. The US firm claims that Toshiba would be violating a partnership agreement with them if they were to force through a sale of its chip arm. Deal, no deal, and which deal, all remains to be seen. But it is sure to be a busy couple of weeks at Toshiba, with last minute negotiations set to provide the Toshiba saga a few last twists and turns.

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