Toshiba soars on reports of memorychip unit bids

AFP, TOKYO

Sat, Apr 01, 2017 - Page 10

Toshiba Corp shares yesterday surged as Japanese media said about 10 companies and funds, including Apple Inc, are bidding for its memorychip business, a day after shareholders approved the spin-off plan.

The Tokyo-listed firm surged almost 10 percent before ending the day at ¥241.4, up 5.78 percent.

Japan’s top Nikkei Shimbun daily said the first round of bidding had been completed.

US private-equity firm Silver Lake Partners LP and US chipmaker Broadcom Corp have apparently tendered bids of roughly ¥2 trillion (US$17.9 billion), it said.

The mass circulation Yomiuri Shimbun, Japan’s top-selling daily, said about 10 companies, including Apple, made bids for the chip business, citing unnamed sources familiar with the matter.

Toshiba is to start negotiating with individual candidates next month, the Nikkei said.

It added that any foreign buyer would need to pass a Japanese government review, given concerns about security around systems already using Toshiba’s chips.

A company spokesman declined to comment.

The stories came a day after angry investors lambasted Toshiba executives at a shareholders’ meeting over its warning that annual losses could balloon to more than US$9 billion.

The red ink is largely tied to huge cost overruns and construction delays at its US nuclear power unit Westinghouse Electric Co, which filed for bankruptcy protection this week.

Still, investors agreed to the sale of the memory chip business, the jewel in the Japanese giant’s crown.

The sale is seen as key for the cash-strapped firm’s turnaround, although there are questions about its future without the business.

Toshiba is the world’s No. 2 supplier of memorychips for smartphones and computers, behind South Korea’s Samsung Electronics Co, and the business accounted for about a quarter of its ¥5.67 trillion revenue last fiscal year.

“Short-term investors trying to take advantage of price volatility are looking at Toshiba,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.

“The semiconductor business has been a driver of its earnings. Without that, can it really revive itself?” Sengoku said.