Apple may join Bain’s bid with US$3b infusion

TOKYO/NEW YORK: Apple Inc is playing the role of kingmaker in the contentious battle for Toshiba Corp’s memory chip business.

The iPhone maker was in talks to provide about US$3 billion (RM12.6 billion) in capital for Bain Capital’s bid for the unit, adding to financial support from Dell Inc, Seagate Technology Plc and SK Hynix Inc, according to people familiar with the matter.

That support convinced Toshiba to sign a memorandum of understanding with Bain and work towards a final agreement this month, said the people.

Apple planned to take an equity stake alongside Bain, they said.

If the agreement is completed, it may exceed Apple’s largest deal ever, the US$3 billion acquisition of Beats Electronics LLC.

Apple had opposed Western Digital Corp’s bid and decided to back Bain because of the business’s strategic importance, said the people .

Meanwhile, Toshiba said Western Digital had been “persistently” overstating its rights over the memory chip unit, showing the two remain at loggerheads over the US$18 billion sale.

Toshiba’s statement comes a day after it said it was stepping up talks to sell the unit to the Bainled group.

But it also said it would continue weighing a rival offer from Western Digital.

“Toshiba regrets that Western Digital persistently overstates its limited consent rights in public statements,” said Toshiba, referring to Western Digital’s claim that its consent was required for a sale as it had invested in Toshiba’s semiconductor plant.

Western Digital on Wednesday said it was confident of its ability to protect its rights in the joint venture with Toshiba.

The two firms had last month entered final-stage talks, aiming to sign a deal and put their legal battle to rest, said sources.

But talks stalled as Toshiba, fearing Western Digital was angling to eventually take over the chip business, sought to limit the United States firm’s future stake in the unit, said sources. Toshiba said it “expects and is fully committed to completing a sale” by March next year.

Without an agreement to sell the unit soon, it will be difficult for Toshiba to gain by the end of the financial year in March, regulatory approval and, hence, the funds it needs to cover billions in liabilities at it US nuclear unit.

Toshiba is hoping to avoid reporting negative net worth, or liabilities exceeding assets, for a second straight year — a scenario that could knock it off the Tokyo Stock Exchange.