Published: Wed, September 13, 2017
Business | By Max Garcia

Western Digital and pals win Toshiba chip unit bid, claims report

Western Digital and pals win Toshiba chip unit bid, claims report

Other suitors in the frame are a group led by Western Digital, Toshiba's US-based chip factory partner and Taiwan's Hon Hai Precision, better known as Foxconn. In addition to being a competitive force in chips, Western Digital is also the world's largest manufacturer of disk drives, competing against Seagate Technology (STX).

As reported at Reuters; A deal would mark an end to months of uncertainty for Toshiba, which is scrambling to sell its flash memory unit - the world's No. 2 producer of NAND chips - to cover billions in losses at its bankrupt USA nuclear business Westinghouse.

Toshiba is under heavy pressure to sell the chip unit, in order to cover massive losses from its nuclear division and avoid having its stock delisted from Japan's stock exchanges.

Toshiba denied the report on Tuesday by Japan media group Nikkan Kogyo that said Western Digital won the bidding process. Although reports earlier today suggested a deal had been arranged with Western Digital, an article from Reuters has revealed it is Bain's bid that's now being pushed through.

Embattled Toshiba Corp. needs the sale of its lucrative NAND flash-memory SanDisk joint venture to survive. The Japanese company is looking to finalize the deal at a board meeting next week.

Other members of group, which is offering 1.9 trillion yen ($17.4 billion), will include the Innovation Network Corp of Japan and the Development Bank of Japan as well as KKR, with each putting up 300 billion yen, they said.

A number of other institutional investors and hedge funds also recently modified their holdings of the business. Apple, one of the biggest buyers of Toshiba semiconductors, is concerned it would lose pricing power in the sector if Western Digital ran a combined operation with Toshiba's business. Western Digital's thought to have since retracted part of its bid. On Saturday Patently Apple posted a follow-up report titled "The Bain, SK Hynix, Apple bid for Toshiba has been upped to $22 Billion as Decision Time Draws Nigh". The data storage provider reported $2.93 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.51 by $0.42.

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