Toshiba aims to finalise Bain deal on Wednesday

TOKYO: Toshiba Corp is aiming to finalise a deal to sell its memory chips business to a group led by Bain Capital at a board meeting on Wednesday, despite opposition from partner Western Digital Corp, according to people familiar with the matter.

Toshiba’s effort faced resistance because the Bain Group now included several Western Digital competitors, including Seagate Technology Plc, Kingston Technology Co and SK Hynix Inc, said the people.

Western Digital partnered with KKR & Co to try to buy the chips business, but Toshiba opted for the Bain bid last week, signing a memorandum of understanding as they work towards a final agreement.

Toshiba has been in talks for months to sell its chips business and pay for a disastrous move into the United States nuclear sector. The company needs to raise the money by March to avoid seeing its shares delisted from the Tokyo Stock Exchange.

The auction has been complicated by legal action from Western Digital, which has argued it should have veto rights in any sale because of its partnership with Toshiba in the chips business. The Japanese company disputes that and sued Western Digital for more than US$1 billion (RM4.19 billion) for interfering in the auction.

Toshiba’s board might not be able to reach a final deal this week and if not would revisit the issue the following week, said one of the people.

Apple Inc helped swing momentum away from Western Digital by backing Bain’s effort. The iPhone maker is in talks to provide about US$3 billion in capital for the bid. If the agreement is completed, it may exceed Apple’s largest deal, the $3 billion acquisition of Beats Electronics LLC. Bloomberg