Toshiba reaches no verdict on new Western Digital chip proposal

TOKYO: Toshiba Corp’s board, under pressure to clinch a deal for its prized memory chip unit soon, met on Wednesday to review a revised bid proposed by Western Digital Corp but no agreement was reached, people familiar with matter said.

The latest twist in a tortuous series of revised bids and changing alliances among suitors has seen Western Digital — which has been at loggerheads with Toshiba — offering to drop out of the bid it is organizing if that will help get a deal done and other conditions are met, sources said.

Those conditions include no other rival chipmaker being part of the consortium and a stronger position for the US firm in their joint chip venture, they said.

Scrambling to cover billions of liabilities at its US nuclear unit, Toshiba needs an agreement in the next few weeks.

According to one person with direct knowledge of the situation, Toshiba’s board is aiming to vote on the new proposal next week.

Western Digital had been on the backfoot for much of the auction this year as Toshiba entertained other higher bids.

Relations between the two frayed to the point where the US firm, which argues no deal is possible without its consent, initiated legal action.

Toshiba shares rose nearly 5 per cent on hopes that Western Digital’s compromise, in which it would stay in the consortium but no longer offer financing, would help seal a deal.

But whether the revised proposal will be enough to get the Western Digital-backed consortium, which also includes US private equity firm KKR & Co LP as well as Japanese investors, over the finishing line is unclear. — Reuters