KKR in talks with Toshiba on pre­emp­tive bid for chips unit

New Straits Times - - Business -

TOKYO: KKR & Co is in talks with Toshiba Corp about a pre­emp­tive bid for the Ja­panese com­pany’s mem­ory chips busi­ness that would ac­cel­er­ate com­ple­tion of sale and end ne­go­ti­a­tions with other po­ten­tial ac­quir­ers, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

Toshiba was in favour of the pro­posal from KKR and In­no­va­tion Net­work Corp of Ja­pan be­cause it would sim­plify reg­u­la­tory ap­proval and speed up the de­liv­ery of much-needed cash, said the peo­ple.

KKR and its part­ners, which also in­clude De­vel­op­ment Bank of Ja­pan Inc, have in­di­cated they would pay 1.8 tril­lion yen (RM70.4 bil­lion) to 2.1 tril­lion yen, said one of the peo­ple.

Western Dig­i­tal Corp chief ex­ec­u­tive of­fi­cer Steve Mil­li­gan planned a trip to Ja­pan this week to dis­cuss join­ing the group, said an­other per­son.

Toshiba hadn’t defini­tively de­cided whether to ac­cept the KKR of­fer and might still pro­ceed with the auc­tion, said the peo­ple.

Ri­val bid­ders for the busi­ness in­clude Tai­wan’s Hon Hai Pre­ci­sion In­dus­try Co and South Korea’s SK Hynix Inc and Broad­com Ltd.

The com­pany was sell­ing off as­sets to plug a hole in its balance sheet af­ter enor­mous losses in its West­ing­house nu­clear unit.

The semi­con­duc­tor busi­ness, which makes mem­ory chips for mo­bile phones and other de­vices, was the most valu­able as­set.

Toshiba aims to com­plete the sale by March next year.

The com­pany’s stock has lost half its value since De­cem­ber when it warned of multi­bil­lion­dol­lar losses in the nu­clear unit.

It also faces the po­ten­tial delist­ing of its shares from the Tokyo Stock Ex­change. Bloomberg


KKR and part­ners may pay 1.8 to 2.1 tril­lion yen for the stake in Toshiba’s chip unit.

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