Toshiba in talks with Western Digital

Dhaka,  Thu,  24 August 2017
Published : 11 Jul 2017, 21:45:47
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Toshiba in talks with Western Digital

TOKYO, July 11 (Reuters): Toshiba Corp is in talks with Western Digital Corp and Taiwan's Foxconn, as well as with an already preferred bidder, as it seeks to revive a stalled $18 billion sale of its chip business, banking sources said on Tuesday.

The Japanese conglomerate confirmed it was in talks with suitors, but did not name them, noting it had been unable to reach an agreement by a self-imposed June 28 deadline with its preferred bidder - a group that includes state-backed fund Innovation Network Corp of Japan (INCJ), the Development Bank of Japan (DBJ), US private equity firm Bain Capital and South Korean chipmaker SK Hynix Inc.

A representative for Western Digital declined to comment, and a representative for Foxconn, the world's largest contract electronics maker, formally known as Hon Hai Precision Industry , was not immediately available for comment.  

Talks with the preferred consortium have stalled over what sources say are proposals by SK Hynix that it helps fund a deal through convertible bonds - a step that could eventually give it an equity interest in the world's second-largest maker of NAND flash memory chips.

Toshiba doesn't want its South Korean rival to have an equity or management influence in the chip business - a stance it has taken to satisfy a Japanese government keen to keep Toshiba's technology under domestic control.  

Toshiba told its creditor banks at a meeting on Tuesday that it had begun talks with alternative bidders because talks with the consortium had stalled, the banking sources said. They didn't want to be identified as they were not authorised to speak publicly on the matter.
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