Deal side­lines bid to block sale of Toshiba chip unit

The Korea Times - - WORLD BUSINESS -

SAN FRAN­CISCO (AFP) — A re­quest to block Toshiba from rais­ing much-needed cash by sell­ing a flash me­mory ven­ture was taken off the ta­ble on Fri­day in a Cal­i­for­nia court.

Toshiba and Western Dig­i­tal agreed to an or­der rec­om­mended by a state court judge who asked the com­pa­nies to col­lab­o­rate on an agree­ment in­stead of du­el­ing over an in­junc­tion re­quested by the U.S. com­pany.

The agree­ment re­quires Toshiba to pub­licly an­nounce the sign­ing of any deal to sell the ven­ture, and pro­vide Western Dig­i­tal no­tice two weeks be­fore any such sale closes, ac­cord­ing to the Ja­panese com­pany.

The no­tice would give Western Dig­i­tal time to re­act in court or with an ar­bi­tra­tion panel.

“We are very pleased to have reached this mu­tu­ally ac­cept­able un­der­stand­ing which is ef­fec­tive for a very lim­ited time and which rec­og­nizes Toshiba’s right to ne­go­ti­ate and sign a de­fin­i­tive agree­ment for the sale of its me­mory busi­ness,” Toshiba Cor­po­ra­tion se­nior ex­ec­u­tive vice pres­i­dent Ya­suo Naruke said in a re­lease an­nounc­ing the stip­u­lated agree­ment.

Toshiba ex­pected that con­sum­mat­ing such a deal would take months.

The agree­ment is to re­main in ef­fect un­til 60 days af­ter an in­ter­na­tional ar­bi­tra­tion panel has been cre­ated to con­sider the mat­ter.

While the bat­tle play­ing out in a San Fran­cisco court has cap­tured at­ten­tion, the clash be­tween the com­pa­nies is ex­pected to be re­solved in ar­bi­tra­tion.

“We don’t ex­pect to close a deal dur­ing the pe­riod ad­dressed in the or­der,” Toshiba said in a re­leased state­ment.

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