Japan govt-Bain consortium the preferred bidder
TOKYO: Toshiba Corp has chosen a consortium of Japanese government investors and Bain Capital as the preferred bidder for its chip business, aiming to seal a deal worth some two trillion yen (RM77.23 billion) by next week as it scrambles for funds to cover massive losses.
But prospects for a clean early resolution to the sale of the world’s No. 2 producer of NAND flash chips remain unclear as Western Digital, its chips business partner that has launched legal action to prevent a deal without its consent, was not part of the winning group.
The consortium’s two trillion yen offer appeared to be somewhat less than a 2.2 trillion yen offer from a rival bidder, United States chipmaker Broadcom and its partner US private equity firm Silver Lake.
But the government-Bain consortium, while hastily and awkwardly conceived, has been seen as the most likely suitor by many analysts as it would automatically gain an implicit stamp of approval from the government.
While some analysts believe that talks over the hotly contested deal have been so complex that only a government-led solution is viable, others doubt that the group will provide the leadership the chip unit needs.
In addition to Bain, the group includes state-backed fund, the Innovation Network Corp of Japan and the Development Bank of Japan. South Korean chipmaker SK Hynix Inc and the core banking unit of Mitsubishi UFJ Financial Group Inc are in talks to provide financing.
Following the announcement, Western Digital reasserted in a statement that Toshiba was in breach of their joint venture contracts and said a US court hearing on its request for an injunction was scheduled for July 14. Reuters