Toshiba stock price drops – sale imminent?

The ongoing drama of the sale of Toshiba’s chip business looks set to be entering its final act, as shares of the company dropped by 1.6 per cent early today to 313.2 yen (£2.22).

Last week it was reported that the company had given shareholders a fortnight to decide on a potential buyer, but this latest development may have expedited the proccess. Toshiba has, according to The Nikkei via Reuters, chosen a ‘consortium of Bain Capital and Japanese government investors as the preferred bidder’. This consortium would set in motion the proccess of Innovation Network Corp of Japan (INCJ) buying 50.1 per cent of Toshiba’s memory stocks. 

All of this comes in an effort to make up the $18 billion it needs by next week to pay off huge loans it has accrued. The nature of the sale has seen the Japanese government heavily involved, with emphasis being placed on keeping the firm within the country. 

It had been previously thought that while INCJ is based in Tokyo, the consortium contained investments from US chipmaker Western Digital. However, that report was was debunked after it was reported that it was made up of KKR, SK Hynix, the Development Bank of Japan along with the aforementioned Bain Capital.

It was also believed that Foxconn had put together an offer for the chipmaking business with Apple, Dell, Google, Microsoft and Cisco. 

Regardless of who the potential suitors are, what’s clear is that Toshiba needs to get shot of that particular financial burden and get rid of it fast. This drop in stock price is our clearest indicator that a sale is around the corner. 

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