Toshiba to focus on chip talks with Bain, but doesn't rule out other suitors


TOKYO (Reuters) – Toshiba Corp said on Wednesday it has agreed to focus on selling its prized chips unit to a group led by Bain Capital and South Korean chipmaker SK Hynix, although it is not ruling out a deal with other bidders.
The announcement came after sources told Reuters on Tuesday that Toshiba was now favouring the Bain group after failing to bridge disagreements with rival suitor Western Digital Corp.
Without an agreement soon, it will be difficult for Toshiba to gain by the end of the financial year in March, regulatory approval and hence the funds it needs to cover billions in liabilities at it U.S. nuclear unit.
Western Digital, which jointly invests in Toshiba’s key NAND memory plant but which has been at loggerheads with the Japanese firm for much of the auction – said it was disappointed as well as surprised at the development given its legal position.
The group had been chosen preferred bidder in June.
But those talks lapsed as Japan government investors who had been part of that consortium told Toshiba they were reluctant to close a deal in the face of legal challenges posed by Western Digital.
A California court has ordered Toshiba to give the U.S. firm two weeks’ notice before a deal is closed.
SK Hynix’s participation could also prolong antitrust reviews, industry watchers said.
If Toshiba does fail to secure sufficient financing by end-March, it is likely to report negative net worth, or liabilities exceeding assets, for a second year running – a scenario that could result in a delisting from the Tokyo Stock Exchange.
(Reporting by Makiko Yamazaki; Additional reporting by Junko Fujita in Tokyo, and Hyunjoo Jin and Joyce Lee in Seoul; Editing by Edwina Gibbs)
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