A group led by Bain Capital LP and Japanese investors has offered about ¥2.1 trillion (US$18.91 billion) for Toshiba Corp’s semiconductor division, emerging as a leading bidder in the hotly contested auction, people familiar with the matter said.
The US private equity firm has the backing of state-supported Innovation Network Corp of Japan (INCJ) and Development Bank of Japan (DBJ), seen as essential to winning Japanese government approval for an acquisition, the people said.
Bain is also in talks with KKR & Co, which led a rival bid, to join the consortium, one of the people said.
Toshiba shares yesterday rose 1.6 percent to close at ¥321.6 in Tokyo trading.
The other leading contender is US chipmaker Broadcom Ltd, which made an offer of about ¥2.2 trillion.
Toshiba’s board met on Thursday to discuss the proposals and aims to decide on a winner by the end of this month.
Under the Bain bid, INCJ would contribute ¥300 billion in equity, while DBJ would contribute another ¥300 billion in preferred shares and equity, the person said.
South Korean chipmaker SK Hynix Inc would provide only loans to avoid anti-trust hurdles and contribute about half of the bidding money, another person familiar with the matter said.
Taiwan’s Hon Hai Precision Industry Co (鴻海精密) has also submitted a bid for the chip unit, but Toshiba is reluctant to sell to the company because of its close ties to China.
Hon Hai chairman Terry Gou (郭台銘) has complained about the unfair process and vowed to press his case.
The auction has been complicated by objections from Western Digital Corp, which jointly owns certain chip assets with Toshiba.
The US company has sought to prevent the business falling into the hands of rivals and is opposed Broadcom in particular.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
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