Japan bid for Toshiba chip unit to include SK Hynix
TOKYO/SEOUL: A Japanese government-led consortium bidding for Toshiba Corp’s chip business will include South Korean chipmaker SK Hynix Inc, sources familiar with the matter said — a move likely to add firepower to the group’s bid in the hotly contested auction.
The sale has seen much tense lastminute jockeying by suitors, leaving the conglomerate little time to come to a decision by its shareholders meeting at the end of this month.
Toshiba is seeking a minimum of $18 billion for the world’s secondbiggest producer of NAND chips and wants to get the deal done as quickly as possible to help it cover billions of dollars in cost overruns at nowbankrupt nuclear unit Westinghouse.
A state-backed fund, the Innovation Network Corp of Japan (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.
INCJ was part of a proposed bid tabled by US chipmaker Western Digital last week that also included US private equity firm KKR & Co LP, sources familiar with the matter said.
But separate sources have also said INCJ is in talks with Bain Capital about bidding for the unit, as the US private equity firm appears willing to put in more money than rivals.
The Asahi newspaper reported that INCJ was now in a consortium that included Bain, KKR, SK Hynix as well as the Development Bank of Japan.
Western Digital, which jointly operates Toshiba’s main chip plant but is now in a bitter dispute with the conglomerate over whether the auction can proceed without its consent, was not included.
The INCJ bid would also exceed 2 trillion yen ($18 billion), the newspaper said.
A person familiar with the matter said on Wednesday that SK Hynix would be providing a loan to help finance the bid although it would not be taking a direct stake. Another person briefed on the matter said the Asahi report was correct on the participants in the consortium.
The sources declined to be identified as they were not authorised to talk on the matter.