Toshiba Corp yesterday said it would hold exclusive talks with a consortium of US, South Korean and state-backed Japanese investors to sell its prized memorychip business, as the loss-hit conglomerate scrambles to raise cash.
The company needs money after taking massive losses in its US nuclear operations that have put the survival of a pillar of corporate Japan in doubt.
Toshiba’s board decided to select the consortium as a “preferred bidder,” the company said in a statement, suggesting the deal is all but imminent.
Photo: Reuters
The group’s joint bid, which is reportedly worth more than ￥2 trillion (US$17.99 billion), is “the best proposal, not only in terms of valuation, but also in respect to certainty of closing, retention of employees, and maintenance of sensitive technology within Japan,” Toshiba said.
The bidding group is comprised of the public-private Innovation Network Corp of Japan, the state-backed Development Bank of Japan and US private equity fund Bain Capital LP, it said.
South Korean chip giant SK Hynix Inc is to participate as a lender in the deal, a Toshiba spokesman said.
Toshiba is aiming to finalize a sale by Wednesday next week’s shareholders’ meeting and close any agreement by March next year, “upon clearance of all the required processes, including competition law approvals in key jurisdictions,” it said.
The sale of the memorychip business, seen as key for cash-strapped Toshiba’s turnaround, still faces hurdles as US chip factory partner Western Digital Corp tries to block the sale with a court injunction.
Toshiba “has no right to transfer its JV [joint venture] interest to a third party without” consent of Western Digital’s subsidiary SanDisk Corp, it said in a statement after the Japanese firm’s announcement.
“We remain confident in our consent rights and our legal position and look forward to the hearing for injunctive relief, which is scheduled for July 14,” it added.
Toshiba is the world’s No. 2 supplier of memory chips, behind South Korea’s Samsung Electronics Co and ahead of third-placed Western Digital.
Its chip division has accounted for about one-quarter of its annual revenue.
The inclusion of Japanese investors in the buying group would help ease reported government concerns about losing a sensitive technology to foreign owners, amid questions about security around systems already using Toshiba’s memory chips.
The chips are widely used in data centers, as well as smartphones and computers.
Before the company confirmed the talks, Japanese Chief Cabinet Secretary Yoshihide Suga yesterday said that Toshiba’s semiconductor business was important in terms of “information security” and “from the viewpoint of maintaining jobs.”
Toshiba shares fell 2.18 percent to ￥323 in Tokyo yesterday.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
RSS